Colorado has made the top 10 list for growth over the last couple years and its population now tops 5.5 million. Modest homes in Cherry Creek and other desirable Denver neighborhoods have appreciated greatly as more people continue to move into the area.
If your parents lived in one of these neighborhoods for years and recently passed away leaving you their home, what are your options? Will you owe capital gains on a sale of the property? How do you coordinate with siblings if the property was gifted in equal shares? We’ll answer these questions in this post.
You inherit the property with what is called a stepped-up basis (the fair market value of the property at the time of your parent’s death). If this was the home where you grew up the difference in basis could make a big difference in how much you owe in capital gains on a sale.
If the home has become dated, you may sell for a lower price. Depending on how close you live, investing in a kitchen remodel or broader renovation may help sell the home faster. Keep evidence to support the amount spent on these types of improvements, because they can be added to the home’s basis.
Selling a property
Whether or not your parent had a will, the first step probably involves probate. You would need to seek appointment through Letters Testamentary/Of Administration as a personal representative. For a property held in trust, court involvement may not be necessary.
If the property was gifted in equal shares, you will have to work together with siblings. Some of the things to consider and agree on include:
- A minimal acceptable sale price,
- How property taxes will be paid
- Who will handle upkeep pending a sale
After a parent passes away, speak with an experienced probate attorney to get answers that relate directly to your unique situation. In our next post, we will talk about some options when you want to keep the property in the family.