Inherited a house? Here are your three options (and the tax wrinkle most miss).
Most heirs of a Tampa Bay home call us in one of two states. Either they're paralyzed because they don't know where to start, or they're rushing because a sibling in Phoenix just told them the house is "obviously a goldmine, let's renovate it." Here's what most people in this exact situation get wrong. They make the decision emotionally, not financially. The home that raised you is not the same as the home you inherit. The first one had stories. The second one has carrying costs, taxes, and three siblings who all want different things.
I've helped families across Brandon, Riverview, St. Petersburg, and Clearwater work through this. Here's the framework that actually clears the fog.
Your three options, plain English
Option 1: Keep it (move in or use as a second home)
Best for: you were the primary caregiver, you live nearby, the home suits your life, or it's a Tampa Bay property near family that's worth holding.
Watch out for: ongoing carry costs (taxes, insurance, maintenance) on a house you don't strictly need, and the disagreements that come up if you have co-heirs who want their cash now.
Option 2: Rent it
Best for: you live locally, the property is in rentable condition, the rent comfortably covers PITI (principal, interest, taxes, insurance) plus a 1% maintenance reserve, and you actually want to be a landlord.
Watch out for: the landlord-from-2,000-miles-away experience. If you live in Ohio and inherited a Riverview property, your "passive income" becomes a part-time job with a 90-minute time-zone delay every time the AC quits. Here's the tired-landlord exit when this gets old.
Option 3: Sell it
Best for: you live out of state, the heirs disagree on use, the home needs significant deferred maintenance, or you simply want the inheritance in cash, not in walls.
Watch out for: probate timing (you usually can't sell until probate clears unless the property bypassed probate via trust or lady bird deed) and the emotional weight of selling a parent's home. We give every seller in this situation a slow walk through the process. There's no rush from our end.
The step-up basis (the tax wrinkle most miss)
Here's the single most important tax fact when you inherit real estate. Your cost basis resets to the fair market value of the property as of the date of death.
Why this matters: if your mother bought a 3-bedroom in St. Petersburg in 1985 for $62,000 and it's worth $325,000 the day she passes, your basis is now $325,000, not $62,000. If you sell within a few months for $330,000, your taxable capital gain is only $5,000, not $268,000.
| Scenario | Without step-up | With step-up |
|---|---|---|
| Original purchase (1985) | $62,000 | $62,000 |
| Date-of-death FMV (2026) | $325,000 | $325,000 (new basis) |
| Sale price (2026) | $330,000 | $330,000 |
| Taxable gain | $268,000 | $5,000 |
| Federal cap gains (15%) | $40,200 | $750 |
This is why selling soon after inheriting is usually the most tax-efficient move. The longer you hold and the more the property appreciates, the more gain accumulates above the stepped-up basis. Florida's no-state-income-tax adds to the savings versus inheriting in California or New York. Full Florida tax breakdown here.
One thing your CPA may push you on: get a date-of-death appraisal in writing within 6-12 months of the death, ideally from a Tampa Bay licensed appraiser. The IRS can challenge the basis later, and a contemporaneous appraisal is your best defense.
The Florida probate timeline
If the home wasn't held in a living trust, deeded under a lady bird (enhanced life estate) deed, or owned in joint tenancy with right of survivorship, you'll go through probate. Florida has two main paths:
Formal administration
Used for estates over $75,000. Court-supervised. The personal representative (executor) is appointed, creditors are noticed, debts are paid, and the property is distributed. Hillsborough, Pinellas, and Pasco probate courts typically run 6-12 months for clean estates, longer if contested.
Summary administration
Used for estates under $75,000 (excluding homestead) or when the decedent has been gone 2+ years. Faster, simpler, often 30-90 days. Doesn't appoint a personal representative; the court issues an Order of Summary Administration that transfers title.
Workarounds (when you can sell before probate finishes)
- Lady bird deed. If the parent recorded one, the property transfers automatically at death. Probate bypassed. Sell whenever you want.
- Living trust. Same outcome. Successor trustee takes over and can sell.
- Joint tenancy with right of survivorship. Title transfers automatically to the surviving owner.
- Mid-probate sale with court approval. A Florida personal representative can usually sell during probate with court authorization. Title companies handle this routinely.
Most cash buyers (us included) can hold a contract while probate runs and close the moment letters of administration issue. So you're not locked out of starting the process just because probate hasn't cleared.
The sibling-disagreement problem
This is the #1 reason inherited Tampa Bay homes sit empty for 18 months. One heir wants to keep it as a vacation home. One heir wants to rent it. One heir wants the cash now. Nobody agrees, so nothing happens, and the property accumulates carrying costs (insurance, taxes, lawn, vandalism risk) for over a year.
The cleanest resolution is usually a forced sale: liquidate, split the cash, end the disagreement. Florida law allows any co-owner to file a partition action if heirs can't agree, but it's expensive and slow. Better to agree on the front end. The heir who wants to keep it can always buy out the others.
What to do this week if you just inherited
- Find the will and the deed. Look for trust documents or a lady bird deed in particular. They change everything.
- Talk to a Florida probate attorney. One hour of consultation. Know which probate path applies and the timeline.
- Get a date-of-death appraisal. Critical for step-up basis if you ever sell.
- Secure the property. Change locks, transfer or maintain insurance, keep utilities active enough to prevent freeze-burst risk in winter.
- Get a cash offer in writing. Even if you're not sure what to do, knowing your floor (what the home is worth in cash, today) anchors every other decision. Full Tampa Bay cash sale process here.
The take
Most out-of-state heirs of Tampa Bay homes end up selling. The math agrees with them. Step-up basis usually wipes out the gain. Probate timelines mean a cash buyer who can wait is more useful than a retail listing. And carrying costs on a vacant inherited home eat into the inheritance every month it sits.
If you live locally, love the house, and have alignment with the other heirs, keep or rent it. Otherwise, the cleanest exit is a sale. Here's the broader checklist on whether to sell.
Frequently asked questions
What are my options if I inherited a house in Florida?
Three: keep it, rent it, or sell it. The right answer depends on where you live, your time and capital, and whether the heirs agree.
What is step-up basis on an inherited house?
Your cost basis resets to fair market value as of date of death. So a Tampa Bay home bought for $80K in 1992 and worth $340K at death gives you a $340K basis. Sell at $345K and you owe capital gains tax on only $5K.
How long does probate take in Florida?
Formal: 6-12 months in Hillsborough, Pinellas, Pasco. Summary administration (estates under $75K): 30-90 days. Lady bird deed, living trust, or joint tenancy can bypass probate entirely.
Should I sell or rent my inherited Tampa Bay home?
Sell if: out of state, $20K+ deferred maintenance, heirs disagree, or you don't want landlord life. Rent if: local, good condition, rent covers PITI + reserves, you want the income and the work.
Can I sell an inherited house before probate is finished?
Sometimes. Trusts, lady bird deeds, and joint tenancy bypass probate. Otherwise, mid-probate sale with court approval works. Most cash buyers can hold a contract until letters issue.