Updated November 4, 2026
A quick note first
Tax rules are detailed, and your facts matter. Everything here is general information drawn from IRS and county sources. Talk to a Florida probate attorney and a tax professional about your situation. This site is general information, not legal or tax advice.
Step-up in basis, simply explained
Basis is the starting number used to figure your taxable gain when you sell. If you buy a house, your basis is usually what you paid. For inherited property, the IRS says your basis is generally the fair market value on the date of the decedent's death, whether or not the estate files an estate tax return. People call this a "step-up" when the value at death was higher than what the decedent paid.
The IRS also describes an alternate valuation date that applies only if the executor files Form 706 and elects it. The executor is the person to ask for the value to use.
Gain, loss and reporting
The IRS says that if you sell for more than your basis, you have a taxable gain. If an estate tax return was required, the basis may need to match the final estate tax value, and the executor may give you a Schedule A (Form 8971) showing it. The IRS notes that a penalty can apply if you report a basis higher than the final estate tax value.
Sales are generally reported on Schedule D and/or Form 8949. Ask a tax professional how selling costs, repairs and the length of time you held the home affect your return.
Why a date-of-death value helps
Because basis is tied to the value at the date of death, it can help to document that value. Ask your attorney or tax professional whether a date-of-death appraisal makes sense for this home. Keep it with your estate records.
Also keep records of closing costs and improvements, and talk to a tax professional about how they may count.
Property taxes
The Pinellas County Property Appraiser explains that a home's assessed value resets to full market value the year after a purchase, and it is a mistake to assume the old owner's tax bill carries over. The Property Appraiser also offers a tax estimator tool on its website. For inherited homes, ask the Property Appraiser how your transfer is treated.
If you sell, property taxes for the year are typically prorated at closing between the buyer and seller. Your closing agent can explain the details.
A sample way to think about it
Here is a simple, made-up illustration with round numbers. Suppose a home was worth $300,000 on the date of death, and it later sells for $310,000. Using the date-of-death value as basis, the gain being looked at is the difference, before adjustments for selling costs and other items. The same home would look very different if the basis were the much lower price the decedent originally paid. This is why the date-of-death value matters, and why a tax professional should do the actual math for you.
- Gather the deed, closing statement and any appraisal.
- Ask the executor for the value used for the estate.
- Keep sale paperwork and closing costs.
- Share everything with your tax professional before you sign a contract.
Estate and income taxes can be separate questions
The estate may have its own tax filing duties, and heirs may have theirs. These are different from probate. A CPA or tax attorney who works with estates can tell you which apply.
Before accepting any offer, ask them to estimate your tax picture so you are not surprised later.
Next step
Talk to a Florida probate attorney and a tax professional about your situation. This site is general information, not legal or tax advice.
Disclosure: Pinellas Inherited Home Help is part of TheBayPros. TheBayPros' owner is related to Krystal Crichlow of eXp Realty, who may be among the licensed local agents introduced to you. You can choose any agent you like.
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Frequently asked questions
What is the basis of an inherited house?
The IRS says it is generally the fair market value on the date of death (or the alternate valuation date if the executor elects it on Form 706).
Do I owe tax if I sell for what it was worth at death?
If your sale price is not above your basis, the IRS says taxable gain arises only when you sell for more than basis. Confirm with a tax professional.
Who gives me the value to use?
The IRS says to contact the executor. If a Schedule A (Form 8971) was prepared, the executor may provide it.