5 Smart Ways to Lower or Eliminate Capital Gains on an Inherited Property

Inheriting a property comes with a lot of decisions — and taxes are a big one. But here's the thing: with the right strategy, you can significantly reduce or even eliminate what you owe. Here are 5 ways to do it.

1. Sell Before the Home Appreciates

The step-up in basis resets your cost basis to the home's value at the time of inheritance. The sooner you sell, the less the home has had time to appreciate — meaning less taxable gain. Timing your sale strategically can save you thousands.

2. Use the Home as Your Primary Residence

Move in and live there for at least 2 years before selling. This qualifies you for the primary residence exclusion — up to $250,000 tax-free if single, $500,000 if married. That's a massive savings for most people.

3. Offset Gains With Losses

If you have investments that are down, you can sell them in the same tax year to offset your capital gains from the home sale. This strategy is called tax loss harvesting and can wipe out a significant chunk of your tax bill.

4. Donate the Property to Charity

If you don't need the money, donating the inherited home to a qualified charity lets you avoid capital gains entirely and potentially gives you a charitable deduction. It's a niche strategy but worth knowing about.

5. Do a 1031 Exchange

If you want to reinvest rather than cash out, roll the proceeds into another investment property through a 1031 exchange. This defers your capital gains taxes indefinitely as long as you keep reinvesting.

Not Sure What to Do?

Sometimes the simplest move is the best one — sell it fast, take advantage of the step-up in basis, and move on with cash in your pocket.

Real Time Home Buyers Metro Detroit makes that easy. We buy inherited homes in any condition, anywhere in Metro Detroit, for cash.

📞 Call or text us: 248-509-5398

No repairs. No agents. No waiting. Just a fair cash offer from a team that knows Metro Detroit.

📞 248-509-5398 — Real Time Home Buyers Metro Detroit is ready to help.

This is for informational purposes only. Always consult a tax professional.