What to do with the Inherited Family Home
September 15, 2026
CNBC’s Money 101 newsletter with Sharon Epperson published an article on August 6, 2026 entitled “Inheriting a home can leave siblings with financial headaches — how to avoid costly mistakes”. The article estimates that tens of trillions of dollars are expected to change hands between generations in the next couple of decades in what is known as the “great wealth transfer”, as baby boomers and members of the silent generation pass away and leave their homes and other assets to their heirs. According to CNBC, inherited homes accounted for a record 8.85% of all U.S. single-family residential and rural property transfers in 2025.
It is often difficult for the heirs to decide what to do with the house because they may have different ideas, which include both financial and emotional considerations. Some siblings may want to sell the property, while others may wish to rent it, and yet others may envision buying out the other siblings. Taxes and maintenance are just some of the considerations that heirs are faced with upon inheriting the family home.
As part of the federal tax consideration, it is important to know that the property is inherited at its current value as of the date of death of the original owner. This is commonly referred to as a “step up in basis”, and it is helpful to obtain an appraisal immediately after the original owner’s passing in order to determine that value. If the property is sold immediately after it is inherited, the federal tax liability should be minimal. If the heirs delay a sale, the federal tax liability will be based on the increase in value between the time of owner’s death and the time of sale. As part of the local property tax consideration, it is important to know that the value of the property will be reassessed as of the time when ownership changes hands through the inheritance. This reassessment will likely increase the property taxes, sometimes quite significantly.
The uncertainty and stress associated with inheriting the property of a loved one can sometimes lead to stressed relations. While some of these uncertainties are inevitable, others can be addressed through communication and a properly drafted estate plan.
Click https://www.cnbc.com/2026/08/06/inherited-home-sell-rent-keep.html to view the CNBC article.
