Understanding Taxes When Selling a Parent’s House in Houston

Selling a parent’s home is often part of a larger life transition — whether they’re moving into assisted living, downsizing, or the property has been inherited. Amid the emotions and logistics, many families are surprised to learn that there may be tax consequences tied to the sale.

While not all home sales result in a tax bill, understanding how capital gains, estate laws, and trust structures work can help you avoid costly surprises. Whether you’re navigating the sale while your parent is still living or managing the property as an heir, knowing what to expect can help you protect more of the home’s value.

Here’s a clear breakdown of what Houston families should know before selling a parent’s house — and how TX Cash Home Buyers can support you through the process.

Key Tax Considerations When Selling a Parent’s Home

1. Capital Gains Tax

When a home sells for more than its original purchase price, the IRS may apply capital gains tax on the profit. However, there are some important exceptions that could reduce — or even eliminate — this tax.

💡 Primary Residence Exclusion

If your parent has lived in the home for at least two out of the last five years before the sale, they may qualify for the capital gains exclusion:

• Up to $250,000 for individuals
• Up to $500,000 for married couples filing jointly

This exclusion can dramatically reduce (or eliminate) any tax due on the sale.

💡 Step-Up in Basis

If your parent has passed away and you inherit the home, the property’s tax basis is “stepped up” to its fair market value at the time of death. This means you’re only taxed on any gains that occur after you inherit it — not on decades of appreciation.

This is one of the most significant tax benefits when selling an inherited home and can reduce capital gains considerably.

2. Inheritance and Estate Taxes

While the term “estate tax” can sound intimidating, most families in Texas won’t need to worry about it. Federal estate tax only applies to very high-value estates (over $13.6 million in 2024), and Texas has no state inheritance tax.

That said, if you’re inheriting a home as part of a large estate, it’s still wise to consult with an estate attorney or CPA to ensure everything is reported correctly.

3. Gift Tax Considerations

Sometimes, families consider transferring ownership of a home before a parent passes, thinking it will simplify things. But this can backfire.

Transferring a house without compensation may be treated by the IRS as a gift, subject to annual and lifetime gift tax limits. It can also cause the recipient to lose the step-up in basis benefit — potentially resulting in a much higher capital gains tax if the home is sold later.

Before transferring ownership, speak with a financial or tax advisor to understand the full implications.

4. Property Taxes and Liens

Even when a home sits vacant, property taxes continue to accrue — and if there are past-due taxes, HOA fees, or liens, those will need to be cleared before the sale can close.

At TX Cash Home Buyers, we help identify any outstanding obligations early and can work with you to resolve them quickly, so they don’t delay closing.

Selling a Home Held in a Trust: What to Know

Many families place a home into a trust as part of estate planning. If that’s the case for your parent’s property, here’s how it may affect the sale:

• Revocable Trusts:If your parent set up a revocable living trust, the home is still considered part of their estate for tax purposes. The capital gains exclusion for a primary residence can still apply if the owner meets the eligibility rules.
• Irrevocable Trusts: Homes held in an irrevocable trust are more complex. Since the home may no longer legally belong to the parent, the trust itself may owe capital gains tax, and it may not qualify for the primary residence exemption. Trusts are also typically taxed at higher rates than individuals.

Before moving forward with a sale, it’s essential to review the trust documents and talk to a tax professional or estate attorney who can help you minimize tax exposure.

How Selling the Home Can Ease the Financial Burden

The cost of assisted living or long-term care in Houston can be significant — often thousands of dollars per month. For many families, selling the family home is the most direct way to unlock funds to help cover these costs.

Benefits of selling the home include:

• Accessing equity to cover care, housing, or medical needs
• Eliminating ongoing costs like taxes, insurance, and repairs
• Reducing financial stress and allowing your family to focus on care, not property management

How TX Cash Home Buyers Can Help Simplify the Process

Selling a home while managing the emotions and logistics of elder care or estate planning can feel overwhelming. That’s where we come in.

At TX Cash Home Buyers, we offer solutions that make the process easier — especially for families facing tight timelines or complex situations.

Here’s how we support you:

✅ Fair, Fast Cash Offers

We can provide a no-obligation offer within 24–48 hours and close in as little as 14–30 days — ideal if your family needs quick access to funds.

✅ Sell As-Is, No Repairs Needed

Forget the stress of cleaning, staging, or fixing up the home. We buy properties in their current condition.

✅ No Commissions or Hidden Fees

When you sell directly to us, you skip the realtor fees and keep more of the proceeds.

✅ Help With Title and Tax Issues

We work with local title professionals and can connect you with tax advisors or attorneys if needed. We’re here to help you navigate each step with clarity and peace of mind.

Final Thoughts

Selling a parent’s home in Houston is more than just a real estate transaction — it’s a financial decision tied to legacy, care, and long-term planning. Understanding the tax implications can help you protect the value of the home and make informed choices that support your family’s future.

Whether you’re looking for a fast sale, need help with a home in probate or a trust, or simply want to explore your options, TX Cash Home Buyers is here to help.

📞 Call or text us today at (281) 595-7550
💬 Or request a free consultation to discuss how we can support you through the process.