Inheriting a home can feel like both a gift and a challenge. On one hand, it’s a valuable asset. On the other hand, the tax rules around inherited property can feel confusing—especially if you’re considering selling.

The good news? You’re not alone. We’ve worked with many people in Jacksonville navigating this same situation, and here are a few key things you’ll want to know:

1. No Home Sale Tax Exclusion (Unless You Live There) Normally, homeowners can exclude up to $250,000 in profit ($500,000 for married couples) from taxes when selling their primary residence. But inherited homes don’t automatically qualify. The exclusion only applies if you live in the home and use it as your primary residence for at least two years before selling.

2. Benefit from Stepped-Up Basis Rules Here’s some good news: the IRS uses what’s called a “stepped-up basis.” That means the property’s tax basis is adjusted to its fair market value at the time of the original owner’s death—not the original purchase price.

Why does that matter? Let’s say the home was bought decades ago for $80,000 but was worth $250,000 when inherited. If you sell for $260,000, you’ll only pay taxes on the $10,000 gain (not the $180,000 difference). This often reduces the tax burden significantly.

3. Deduct Up to $3,000 Per Year for Losses If you sell the inherited home for less than its fair market value (the stepped-up basis), the difference counts as a capital loss. You can deduct that loss against your taxable income—up to $3,000 per year. If the loss is larger, you can carry it forward to future tax years until it’s fully used.

4. Selling As-Is for Cash Can Simplify Everything For many families, managing an inherited property is overwhelming—especially if repairs are needed or multiple heirs are involved. If you’d rather avoid the hassle of updates, showings, or long listing times, selling as-is for cash can be a stress-free solution.

At Evergreen Home Buyers, we’ve helped many Jacksonville homeowners sell inherited houses quickly. We buy properties in any condition, pay all closing costs, and can close in as little as two weeks.

Call us today at (904) 342-3216 for a fair cash offer and to learn more about your options.

Bottom line: Inheriting a home comes with responsibilities, but also opportunities. By understanding the tax rules and exploring your selling options, you can make the best decision for your situation.