Selling Inherited Property in Texas: Will I Owe Capital Gains Tax?

Selling a home you inherited might seem straightforward—until you hear the words “capital gains.” In Texas, there’s no state income tax, but that doesn’t mean you’re in the clear when it comes to capital gains. Whether you’re navigating this process in Killeen, Harker Heights, Belton, Jarrell, or anywhere across central Texas, timing and strategy can mean the difference between a smart financial move and an unexpected tax bill. Let’s break down what you need to know about selling inherited property in central Texas.

Understanding Inheritance and Tax Basics

Inheriting a property doesn’t automatically create a tax bill. That’s good news. However, what you do next could impact your financial outcome. If you decide to sell the property, you might owe capital gains tax—but only on certain profits.

Here’s the kicker: your taxable gain is based on the property’s “stepped-up” basis. That means you’re not taxed on what Grandma paid for it decades ago. Instead, the basis resets to the property’s market value at the time of the original owner’s death. This adjustment can significantly lower or eliminate your taxable gain when you sell.

Capital Gains Tax in Texas—What You Should Expect

Texas doesn’t charge a state-level capital gains tax, which is a win. However, the federal government does. If you sell the property for more than the stepped-up basis, that difference may be taxed.

Long-term capital gains rates typically range from 0% to 20%, depending on your total income. Most inherited properties fall under the long-term category, even if you sell right away.

Let’s say you inherited a house in Harker Heights. The market value was $280,000 when you inherited it. If you sell it for $290,000 a few months later, you might only owe tax on the $10,000 gain—assuming there were no major expenses or improvements to factor in.

Deductible Expenses Can Lower Your Gain

Selling costs can help you out here. Real estate commissions, title fees, and necessary repairs made to sell the property can reduce your taxable profit. Always keep good records of what you spend.

Maybe you inherited a home in Belton and had to spend $5,000 on roof repairs to close the deal. That $5,000 counts against your gain. It’s the kind of detail that can shrink your tax bill noticeably.

When Timing the Sale Can Make a Difference

Markets move. And while property values in many central Texas cities have been relatively steady recently, that’s not always the case. When markets shift—either up or down—the timing of your sale can affect how your proceeds compare to that stepped-up basis.

Sell quickly, and your sale price might match the inherited value. Wait too long, and if values drop, you risk leaving money on the table. Alternatively, if values climb, your tax exposure could grow. Either way, having control over when and how you sell puts you in a better position.

Inherited Property Comes with Complexity—iVest Homes Offers Simplicity

This is where iVest Homes can be a valuable resource. We understand that selling an inherited home isn’t just about paperwork or pricing—it’s about clarity, timing, and relieving a heavy burden.

Rather than listing on the open market and waiting weeks or months, we buy homes directly for cash. This approach can help you:

• ○ Sell quickly while the stepped-up basis is still current
• ○ Avoid the hassle of staging, repairs, and showings
• ○ Eliminate the wait and uncertainty of finding a buyer
• ○ Move forward with peace of mind, not paperwork

Whether you inherited the home recently or are just now ready to sell, we’re here to walk you through the options.

Not Every Seller Wants to Go the Traditional Route

Selling through an agent works for some, but others want to keep it private and efficient. Maybe you live out of town. Maybe you’re sharing ownership with siblings. Or maybe you just want to move on. That’s where an all-cash offer from iVest Homes simplifies everything.

You don’t need to worry about prepping the home, juggling repairs, or hosting strangers for showings. We evaluate the property, make a fair offer, and handle the details. You decide what works best for your timeline and goals.

Handling Taxes Is Easier with the Right Information

We always recommend speaking to a tax advisor before closing the sale. They can help you understand your potential federal liability and how deductions from the sale may apply. You don’t want to be caught off guard, especially if this is your first time selling inherited property.

But one thing is certain—Texas’s tax structure gives you a head start. With no state income tax to worry about, your only focus is handling any federal capital gains with smart timing and a strategic sale.

How iVest Homes Helps You Sell Inherited Property in Central Texas

At iVest Homes, we buy inherited homes for cash in Killeen, Harker Heights, Jarrell, Belton, and surrounding central Texas cities. We know the ins and outs of these local markets, but more importantly, we understand what sellers are really looking for: less waiting, fewer unknowns, and a clear, fast path forward.

If you’ve recently inherited property in Texas and are wondering about capital gains tax—or just want to avoid the drawn-out listing process—we can help. Call iVest Homes today to schedule a no-pressure consultation. We’ll talk through your goals, answer your questions, and if it’s a fit, make you an offer that gets you one step closer to moving on.

Categorised in: Home Selling Tips