Selling an Inherited Home in New York

To sell an inherited home in New York, someone must first have legal authority to sign the deed: usually the executor named in the will (with letters testamentary from the Surrogate's Court) or a court-appointed administrator if there was no will. The good news on taxes is that heirs generally take a “stepped-up” basis equal to the home's value at the date of death, so a sale soon after usually produces little or no taxable gain.

Below is the order things happen in, what it costs to hold the home while you wait, and what is different about inherited co-ops.

Step 1: Figure out who can sell

How the home was titled decides the path. If it was owned jointly with a right of survivorship, the surviving owner usually already owns it and can sell after clearing the title paperwork. If it was held in a trust, the trustee sells under the trust's terms. If the person who died owned it alone, the home is part of the estate, and a fiduciary appointed by the Surrogate's Court in the county where the person lived handles the sale.

Under New York's fiduciary powers law (EPTL §11-1.1), an executor or administrator can generally sell estate property at a public or private sale on terms they judge best for the people who inherit. There are limits. The power does not reach property the will gives to a specific person (“my house to my daughter”), and a will or court order can restrict it. Where a will forbids a sale, the Surrogate can still approve one when it is needed for purposes listed in SCPA §1902, such as paying administration expenses, debts or estate taxes, or distributing shares to the people entitled to them. A buyer's title company will ask for certified letters and may ask for more, so line these up before you sign a contract.

Step 2: Lock down the value at the date of death

The IRS says the basis of inherited property is generally its fair market value on the date of death, or on the alternate valuation date if the estate chooses it on a federal estate tax return. When an estate files that return, the executor may send heirs a Schedule A (Form 8971) showing the reported value, and certain heirs must use that value as their starting basis.

Most estates don't file a federal estate tax return, so you need your own evidence of value. A written appraisal as of the date of death is the cleanest record. Recent comparable sales help too; you can check sold prices near the home on Roofy's NYC sales records.

Worked example: why the step-up matters

A parent bought a Queens two-family house in 1988 for $180,000. It was worth $1,100,000 when the parent died. The executor sells it ten months later for $1,150,000 and pays $85,000 in broker fees, transfer taxes and other selling costs.

With the step-up there is no gain at all. Without it, $885,000 would be taxable. Because inherited property is always treated as held for more than a year, any gain you do have is long-term. The step-up is also why heirs often sell sooner rather than later: any rise in value after the date of death is taxable. Try the numbers in the home sale capital gains calculator, entering the date-of-death value as your purchase price.

Step 3: Budget for carrying costs during probate

Probate and administration take time, and the home keeps costing money. The estate, not the heirs personally, normally pays these from estate funds, but if the estate has little cash, heirs sometimes advance the money. Keep receipts; the executor accounts for every dollar.

• Property taxes or co-op maintenance / condo common charges. Unpaid NYC property taxes accrue interest; see the late interest calculator.
• Mortgage payments, if there is a loan. Keep it current and ask the servicer what it needs to deal with the executor.
• Insurance. Tell the insurer the owner has died and whether the home is empty. Read the policy's vacancy clause.
• Utilities and upkeep: heat in winter to protect pipes, water, a lock change, and lawn or snow removal for a house.
• Tenants: if part of a two-family is rented, the leases continue and the estate is now the landlord.

Step 4: Prepare, price and sell

1. 1

   Agree on a plan among the heirs

   Decide early whether one heir wants to buy out the others, whether to sell as-is or fix up first, and how costs will be shared. Disagreements are the most common cause of delay.
2. 2

   Clear out and secure the home

   Remove valuables and documents, photograph the condition, and change the locks. Don’t give away or sell contents until the executor approves; they belong to the estate.
3. 3

   Choose how to sell

   Many estate homes sell as-is because the heirs don't want to fund a renovation. Compare the net results of repairing versus selling as-is; see selling a house as-is.
4. 4

   Sign the contract as the fiduciary

   The executor or administrator signs in that capacity. The buyer’s title company will check the letters, the will (if any) and whether court approval is needed.
5. 5

   Close and distribute

   Sale proceeds go to the estate account, not directly to heirs. The executor pays debts, taxes and expenses first, then distributes what is left as the will or intestacy law directs.

Inherited co-ops: an extra layer

A co-op is not real estate in the legal sense. The estate inherits shares in the corporation and a proprietary lease, so the co-op's own documents control what happens next. Expect these differences:

• The board has to approve the buyer, just as in any co-op sale, and a flip tax may apply. See selling a co-op and co-op flip tax.
• If an heir wants to move in or keep the apartment instead, the proprietary lease and bylaws decide whether board approval is needed for that transfer. Ask the managing agent for the rules in writing.
• Maintenance keeps coming due every month. Arrears can lead the co-op to take action against the shares under the proprietary lease.
• The managing agent will want the letters, a death certificate and the stock certificate and proprietary lease (or a lost-document affidavit).

New York tax at the sale

If the estate or the selling heir is a New York nonresident, New York requires estimated income tax on the gain when the deed is recorded, on Form IT-2663 (houses and condos) or IT-2664 (co-ops). For 2026 the rate is 10.90% of the gain. State instructions say a nonresident estate must estimate tax on the entire gain, regardless of later distributions to beneficiaries. With a stepped-up basis there is often little or no gain, so little or nothing is due. See the nonresident seller estimated tax calculator.

Federal and New York estate taxes are separate from income tax on the sale. Whether an estate owes them depends on its total size; the executor and estate attorney handle those returns.