Quick answer: When you inherit a house, its tax basis generally “steps up” to its fair market value on the date the owner died (IRS). If you sell soon for about that value, you’ll owe little or no capital gains tax. You only pay tax on the gain above that stepped-up value, and Kansas has no estate or inheritance tax.
We’re not attorneys or tax professionals. This guide comes from our own research and experience buying inherited houses in Wichita. We’re happy to support you through the process, but you should always talk with a tax professional and an attorney to guide you through the tax and legal side of your situation.
How the stepped-up basis works
Your basis is the starting value used to figure your gain. For an inherited house, it’s generally the fair market value on the date of death, not what the original owner paid. In some cases the estate can choose an alternate valuation date instead, but only if it files an estate tax return and elects it.
That’s why it’s worth getting an appraisal as of the date of death. It documents your basis if the IRS ever asks.
A worked example
These numbers are made up to show how the math works.
| Item | Amount |
|---|---|
| What your parent paid in 1995 | $60,000 |
| Fair market value on the date of death (your basis) | $180,000 |
| Your sale price | $190,000 |
| Selling costs (commission, closing costs) | −$12,000 |
| Taxable gain ($190,000 − $12,000 − $180,000) | $0 (a $2,000 loss) |
Without the step-up, the gain would have been figured from the $60,000 purchase price. The step-up erases decades of appreciation.
Capital gains, long-term treatment, and losses
- Gains: If you sell for more than your basis plus selling costs, the difference is a capital gain. Gains on inherited property are generally treated as long-term, which usually means a lower tax rate, no matter how soon you sell.
- Jointly owned homes: If the house was owned jointly with a surviving spouse, usually only the half that belonged to the person who died gets the step-up. Ask your preparer.
- Losses: If it sells for less, ask your tax preparer whether you can claim the loss. It can depend on how the house was used after you inherited it.
- Kansas income tax: Your gain may also count toward your Kansas income tax. Your preparer can tell you how.
Reporting the sale
Report the sale on Form 8949 and Schedule D of your federal return (IRS). Keep the date-of-death appraisal, the closing statement, and receipts for any repairs or selling costs.
Estate and inheritance tax
- Federal estate tax: For 2026, the federal estate tax exemption is $15 million per person (Kiplinger), so most estates owe none.
- Kansas estate tax: Repealed for people who died on or after January 1, 2010 (Kansas Department of Revenue).
- Kansas inheritance tax: Ended July 1, 2008 (Kansas Department of Revenue).
Before you can sell
The person handling the estate needs legal authority to sell, unless the house passed outside probate, for example by a transfer-on-death deed. Our guide to probate and selling an inherited house in Kansas explains the steps. If several heirs share the house, agree on the sale in writing first.
Selling an inherited house to Kansas Home Guys
We buy inherited houses as-is in Wichita and nearby towns. You don’t need to clean out the house or make repairs, and you can leave behind anything you don’t want. We make an offer as soon as we’ve seen the house, often within 24 hours. You choose the closing date, which can be as little as 7 days once the title is clear, and we always close through a local title company. You pay no commissions or closing costs, and the closing statement gives you the sale price and costs your tax preparer will need. Learn more on our sell an inherited house page.
FAQ
Do I have to pay taxes on an inherited house?
Not just for inheriting it. You may owe capital gains tax if you sell for more than its value on the date of death plus your selling costs.
Does Kansas have an inheritance tax?
No. The Kansas inheritance tax ended in 2008, and the Kansas estate tax was repealed for deaths in 2010 and later.
Should I sell right away or wait?
Selling soon usually keeps the gain small, because the price is close to the stepped-up basis. If you wait and the house rises in value, you may owe tax on that increase.
Talk with us
Call us at 316-854-1050 or get a no-obligation cash offer.