Step-Up in Basis: Selling an Inherited Florida House

Published by Cash Flow Deals · Last updated 2026-08-03 · Reviewed by Camilo Palacio, Licensed Florida Real Estate Professional (License #3280644, REALTOR®), affiliated with Silver Door Realty, LLC (License #CQ1064903) · 4 min read

Step-up in basis means your cost for tax purposes resets to the house's fair market value on the date the person you inherited it from died, not what they originally paid. Sell close to that value and you owe little or no capital gains tax. With Cash Flow Deals, you choose between the Fast Cash Offer, where we buy your house as-is and close, and the Premium Cash Offer, where a pre-approved FHA or conventional buyer we already have, ready to go, pays more and buys directly from you. The number is agreed before any work starts, and it changes only if you agree. The one exception: if something structural surfaces that was not visible or disclosed before we signed — foundation issues, hidden moisture, old wiring, cast-iron drain failure — we re-cost it and bring the number back to you. You decide. You can walk away. We disclose what we know at offer time so this almost never happens.

Factor	Traditional Listing	Cash Flow Deals
Timeline	6 to 12+ months to list, inspect, and close through a traditional mortgage buyer, plus time to sort out basis and any estate paperwork first	You choose the Fast Cash Offer, where we buy as-is and close, or the Premium Cash Offer, where a pre-approved FHA or conventional buyer we already have, ready to go, pays more and buys directly from you. You help pick the closing date; Premium depends on the buyer's lender. If that loan falls through, that is our problem, not yours, and you can still choose Fast Cash at its own number.
Repairs	Seller typically pays for repairs or credits before a lender will approve the buyer's loan on the house	With either the Fast Cash Offer or the Premium Cash Offer, the number is agreed before any work starts, and it changes only if you agree. The one exception: if something structural surfaces that was not visible or disclosed before we signed — foundation issues, hidden moisture, old wiring, cast-iron drain failure — we re-cost it and bring the number back to you. You decide. You can walk away. We disclose what we know at offer time so this almost never happens.
Fees / Costs	Listing commission (negotiable since the 2024 NAR Sitzer/Burnett settlement) plus closing costs, appraisal, and inspection fees	Cash Flow Deals is paid as a separate line item on the closing statement, not a markup on price

What Step-Up in Basis Actually Resets

Basis is the number the IRS uses to measure your gain or loss when you sell something. Under Internal Revenue Code Section 1014, when someone inherits real property, the basis doesn't carry over from what the original owner paid decades ago. It steps up to the property's fair market value on the date that person died. If your parents bought the house for $60,000 in 1985 and it was worth $310,000 the day they died, your basis for tax purposes is $310,000, not $60,000. That single reset is why most people who sell an inherited house quickly owe little to no federal capital gains tax.

How the Date-of-Death Value Gets Set

Fair market value on the date of death usually comes from a professional appraisal or a comparable-sales analysis done around that date, not months later when you're ready to sell. Under Internal Revenue Code Section 2032, the estate's executor can instead elect an alternate valuation date six months after death, but only if that election lowers the overall taxable value of the estate. Most estates don't use this election. Get a written appraisal dated close to the date of death and keep it. It's the document that proves your basis if the IRS ever asks.

Cash Flow Deals' Process for an Inherited House

Cash Flow Deals' Process: 1. Request your written offers so you have real numbers to compare against your stepped-up basis before you decide anything. 2. Choose your Fast Cash Offer, where we buy your house as-is and close, or your Premium Cash Offer, where a pre-approved FHA or conventional buyer we already have, ready to go, pays more and buys directly from you. With Premium, that buyer's lender funds the purchase and title transfers once, directly from you to that buyer. 3. You help pick the closing date. We cover repair costs, and we figure out a way, so nothing comes out of your pocket. Premium repairs are limited to what the buyer's lender requires, with costs settled from the sale proceeds out of our share; Fast Cash requires no repairs from you. The number is agreed before any work starts, and it changes only if you agree. The one exception: if something structural surfaces that was not visible or disclosed before we signed — foundation issues, hidden moisture, old wiring, cast-iron drain failure — we re-cost it and bring the number back to you. You decide. You can walk away. We disclose what we know at offer time so this almost never happens. If the Premium buyer's loan falls through, that is our problem, not yours, and you can still take the Fast Cash Offer at its own number. 4. You walk away with your net proceeds and the paperwork you need to report the sale accurately on your tax return.

Co-Owned and Joint Property Works Differently

If you owned the house jointly with the person who died, rather than inheriting it solely from them, the step-up usually only applies to their half of the property. Your original share generally keeps its original basis, while the deceased owner's share gets the fair market value reset. That split matters most for siblings who inherit a parent's house together, or a surviving joint owner who bought the property together with the decedent years before the death. Confirm how your specific ownership was titled with a CPA or a licensed Florida real estate attorney before you calculate your basis.

Why This Math Changes How You Should Sell

With Cash Flow Deals, you choose between the Fast Cash Offer, where we buy your Florida house as-is and close, and the Premium Cash Offer, where a pre-approved FHA or conventional buyer we already have, ready to go, pays more and buys directly from you. With Premium, your home may be listed through Silver Door Realty, a licensed Florida brokerage, with a licensed agent and scheduled showings. We cover repair costs, and we figure out a way, so nothing comes out of your pocket. On Premium, only what the buyer's lender requires gets fixed, with repair costs settled from the sale proceeds out of our share; with Fast Cash, you make no repairs. The number is agreed before any work starts, and it changes only if you agree. The one exception: if something structural surfaces that was not visible or disclosed before we signed — foundation issues, hidden moisture, old wiring, cast-iron drain failure — we re-cost it and bring the number back to you. You decide. You can walk away. We disclose what we know at offer time so this almost never happens. If the buyer's loan falls through, that is our problem, not yours, and you can still take the Fast Cash Offer at its own number instead of the Premium Cash Offer. Because step-up in basis usually keeps taxable gain low right after inheriting, selling close to that value can leave you with more after taxes than you expect. Comparing your sale proceeds with your stepped-up basis helps you understand the sale, while a CPA can confirm your tax treatment.

Common questions

Do I have to pay capital gains tax on the full sale price of an inherited house?

No. You only owe tax on the gain, which is the sale price minus your stepped-up basis, not the full sale price. Since your basis resets to fair market value at the date of death under Internal Revenue Code Section 1014, that gain is often small if you sell soon after inheriting.

How do I find out what the house was worth on the date the person died?

A licensed appraiser can produce a retrospective appraisal dated to the date of death, or a real estate professional can pull comparable sales from around that time. Keep whatever documentation you use. It's your evidence for basis if the IRS ever questions the number.

Does step-up in basis apply if the house is still in the estate and hasn't been distributed to me yet?

Yes. The step-up happens at the moment of death under federal tax law, regardless of how long probate takes to distribute the property to you afterward. Confirm the exact timing and paperwork with a CPA, since estate-level reporting can differ from your personal return.

What if I make improvements to the house before selling it?

Capital improvements you make after inheriting typically get added to your stepped-up basis, which further reduces your taxable gain when you sell. Routine repairs and maintenance usually don't count the same way improvements do. A CPA can tell you which of your specific costs qualify.

Does Cash Flow Deals need to know my basis before making an offer?

No. With Cash Flow Deals, your Fast Cash Offer and Premium Cash Offer are based on your property, not your tax situation, and you choose which fits. The number is agreed before any work starts, and it changes only if you agree. The one exception: if something structural surfaces that was not visible or disclosed before we signed — foundation issues, hidden moisture, old wiring, cast-iron drain failure — we re-cost it and bring the number back to you. You decide. You can walk away. We disclose what we know at offer time so this almost never happens. Your basis matters for what you owe the IRS afterward, so confirm it with a CPA separately from the sale itself.