Selling Inherited Property In Alabama
Good morning to all,
My husband received 25 acres of land/house (life estate) after his mother passed away in 2023. The house is in disrepair. Last year's tax appraisal was approx. $120,000 although we knew it was worth more. The property is located right off a very busy interstate in a location that has seen lots of business growth in just 4 years. He was recently approached about selling the land as a travel center is highly interested in building on the site. I have enough knowledge to know we must hire a CPA to help us navigate the tax implications, etc. Unfortunately, we have been unable to find one as of yet. The property has never had any type of appraisal other than the tax assessment appraisal. Should we get an appraisal now and if so, can an approximate appraisal amount be given for the value of the property at the time of his mother's death? Should there be anything else we may need to do prior to the sale of the land? Again, we are looking for a CPA/Financial Advisor.
Thanks in advance for any insight!!
Most Popular Reply
#3 1031 Exchanges Contributor
- Investor
- Las Vegas, NV
The day your husband inherited the property the value that day became his “stepped up basis”. The only taxes you would owe is on the value the property increased from 2023-2025, minus the cost of selling. Most likely nearly zero. I don’t think the local appraiser is going to call the county and tell them to raise your taxes. If you plan to sell, you don’t really care. It will be sold before the taxes increase.
That appraiser might be able to also tell you what the property was worth 2 years ago. Otherwise same story with the broker you choose. I don’t know if I’d bother with an appraiser as opposed to just a broker. But if you do. Ask them both, what’s it worth today, what was it worth 2 years ago? That minus all selling costs is all you owe taxes on.
Ps. If through some weird fluke teh 2 year difference is a huge number you could do a 1031 for just that increased amount, but I doubt that’s the case unless this is at least a $2-3M property.