SimplySolvd

I inherited an apartment building or commercial property. Now what?

Inheriting a building is rarely simple. You may have acquired tenants, leases, an unfamiliar set of tax rules, and co-owners with different opinions — often during a difficult period. Here is the sequence most heirs work through, in plain English, so you can make a deliberate decision instead of drifting into one.

First: find out how the property was held

This single fact drives your entire timeline. If the building passed through a living trust, the successor trustee generally has authority to manage and sell it right away. If it is in probate, the estate typically needs court authorization before a sale can close, which commonly adds months. An estate attorney can usually tell you which applies in a single conversation.

Second: get a date-of-death appraisal

When you inherit property, its cost basis generally resets to its fair market value on the date the previous owner died — commonly called stepped-up basis. That reset is usually the most financially significant fact in the whole process, and a formal appraisal dated to the date of death is what documents it.

Illustrative example (not a real property, not tax advice)

  • Parent purchased a 12-unit building in 1988 for $310,000
  • Building appraised at $1,400,000 on the date of death
  • Basis generally steps up from $310,000 to $1,400,000
  • Heir sells for $1,425,000 → taxable gain is roughly $25,000, not $1,115,000

The reset is why timing matters: the further you get from the date of death, the more post-death appreciation can become taxable gain. Confirm the specifics with a CPA — this is general information, not tax advice.

Third: gather the building's records

Before any decision — keep, rent, or sell — you want to know what you actually own:

If there is a property manager, they usually hold most of this. If there is no manager and no organized file, it can often be reconstructed from tax returns and bank statements.

You are the landlord now — what that means immediately

Leases run with the building. The estate steps into the landlord role the moment the owner dies, which means insurance needs to stay active, rent needs to be redirected to an estate account rather than the deceased's personal account, and tenants need one clear point of contact. Existing leases stay in force, and their terms cannot be changed just because ownership passed to you.

Keep it or sell it?

There is no universally right answer, but the trade-off is usually straightforward.

Nothing requires you to keep operating a building simply because the previous owner did.

If you decide to sell, a private sale is usually the simplest route

Selling directly to a private buyer avoids a public listing, showings, and broker commissions, and it lets you sell with tenants in place rather than trying to create vacancy first. For heirs who live out of state, share ownership with siblings, or simply want the matter resolved cleanly, that tends to be the least disruptive path. You will still want your own attorney and CPA involved.

Inherited a building and want to know what it's worth?

Tell us about the property and we'll follow up discreetly. No public listing, no commissions, no pressure — or text us at 202-932-7527.

Prefer the full overview first? Visit invest.simplysolvd.com

Frequently asked questions

Do I owe taxes just because I inherited a building?
Generally, inheriting property by itself does not create an income tax bill. Tax usually comes into play when the property earns rental income after the death, or when it is sold. Because inherited property normally receives a new cost basis equal to its fair market value on the date of death, an heir who sells near that value often has little or no taxable gain. This is general information, not tax advice — confirm your situation with a CPA.
What is stepped-up basis in plain English?
Your cost basis resets to what the property was worth on the day the previous owner died, instead of what they originally paid. If a parent bought a building for $300,000 decades ago and it was worth $1.4 million at their death, the basis becomes roughly $1.4 million. Selling near that value means the decades of appreciation during their lifetime are generally not taxed to you.
Why does everyone say to get a date-of-death appraisal?
Because it is the evidence for your basis. A formal appraisal valuing the property as of the date of death is the strongest documentation if the IRS ever questions the number. A tax assessment or an informal opinion of value is weaker support. Heirs who skip this step sometimes pay avoidable tax years later when they sell.
Can I sell while the estate is still in probate?
It depends on how the property was held. If it passed through a living trust, the successor trustee generally has authority to sell without court approval. If it is in probate, the sale usually needs court authorization and can take considerably longer. The first thing to establish is which situation you are in — an estate attorney can usually answer that quickly.
What happens to the tenants and their leases?
Leases run with the building, not with the person who died. The estate steps into the landlord role immediately, existing leases stay in force, and security deposit obligations transfer as well. You cannot change lease terms or remove a tenant simply because ownership changed. When the building is sold, the buyer inherits those same leases.
My siblings and I disagree about whether to sell. What are our options?
Common paths are one heir buying out the others, agreeing to sell and split proceeds, or using a mediator. If co-owners cannot reach agreement, any of them can generally file a partition action asking a court to order a sale. Because that route is slow and costly, most families try to settle it privately first.
Do I have to fix the building up before selling it?
Not for a direct sale. A private buyer purchasing for income expects to handle deferred maintenance and prices it into the offer. That is often preferable for heirs who live out of state or do not want to manage a renovation from a distance.