Do you pay taxes on an inheritance? Including selling an inherited house

General information, not legal, tax or financial advice. Last reviewed Oct 30, 2026.

Quick answerUsually not on the inheritance itself: money or property you receive by inheritance generally isn’t federal taxable income. But income it earns afterward is taxable, withdrawals from an inherited traditional IRA or pension can be taxable, and if you sell inherited property you may owe tax on any gain. That gain is generally measured from the property’s value on the date of death, not from what the person who died paid. None of our five pilot states has an inheritance tax.

The inheritance itselfFederal law

Cash and property: property you receive as a gift, bequest or inheritance generally isn’t included in your income. If it later produces income such as interest, dividends or rent, that income is taxable to you.
Life insurance: proceeds paid because the insured person died generally aren’t taxable, but any interest paid on the proceeds may be.
Retirement accounts: you may have to include part of an inherited pension or IRA in your income. See inherited IRA rules.

Gifts and inheritances are generally not income, but income they later produce is; inherited pensions and IRAs; life insurance death proceeds generally not taxable, interest may be. Source: IRS Publication 525, Taxable and Nontaxable Income, checked Oct 30, 2026.

Selling an inherited house or other propertyFederal law

Find your basis. For inherited property it is generally the fair market value on the date of death. It is the value on the alternate valuation date only if the executor files an estate tax return (Form 706) and elects that date. If a Form 706 was filed, the value on the return is your basis, and you may receive a Schedule A (Form 8971) from the executor that you must be consistent with.
Get proof of the date-of-death value, such as an appraisal. Ask the executor what value was used.
Figure the gain. If you sell for more than your basis, you have a taxable gain. Example: if the house was worth $300,000 when your parent died, the gain is figured from $300,000, not from the price your parent paid decades ago.
Report the sale on Form 8949 and Schedule D if you have a filing requirement. The gross sale proceeds count when deciding whether you must file.

Exception: if you or your spouse gave the property to the person within one year before their death, different rules apply (see IRS Publication 551).

Basis of inherited property; alternate valuation only if elected on Form 706; Form 8971 consistent basis; reporting on Form 8949/Schedule D; proceeds count toward the filing requirement; property given to the decedent within one year. Source: IRS – Gifts & inheritances FAQ, checked Oct 30, 2026.
Basis of an inherited home; value on Form 706 if one was filed. Source: IRS Publication 523, Selling Your Home, checked Oct 30, 2026.

Surviving spouses and community propertyFederal + state

Jointly owned home: if you owned the home with your spouse as joint tenants with right of survivorship or tenants by the entirety, only your spouse’s half gets a new basis at their date-of-death value. Your half keeps its old basis.
Community property states, including California and Texas: when either spouse dies, the whole value of the community property, including the surviving spouse’s half, generally becomes the basis of the entire property, as long as at least half of it is includible in the deceased spouse’s gross estate. The IRS also lists Arizona, Idaho, Louisiana, Nevada, New Mexico, Washington and Wisconsin.

Basis of a jointly owned home after a spouse’s death. Source: IRS Publication 523, Selling Your Home, checked Oct 30, 2026.
Community property basis rule and the list of community property states. Source: IRS Publication 551, Basis of Assets, checked Oct 30, 2026.

State estate and inheritance taxesState law

State	Estate or inheritance tax
New Hampshire	New Hampshire has no estate tax and no inheritance tax in effect.
California	California has no state estate tax or inheritance tax.
Texas	Texas has no state estate tax or inheritance tax.
Florida	Florida has no state estate tax or inheritance tax.
Ohio	Ohio’s estate tax does not apply to people who died on or after January 1, 2013.

For very large estates, see estate taxes explained.

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