EZ Sell Homebuyers
Free Ohio Estate Tool

How Much Tax Will You Owe on an Inherited Ohio House?

Run the numbers on the federal stepped-up basis (IRC § 1014), the 3.8% Net Investment Income Tax, and Ohio income tax on capital gains — and see exactly how much of the sale price you keep.

Built by Mike Wall, licensed Ohio REALTOR® (#2001023573) and Dayton cash buyer with 300+ purchases since 2016 — including dozens of probate and inherited-property closings.

Property & Heir Details

Sets the stepped-up basis valuation date under IRC § 1014.

Use the date-of-death appraisal, broker price opinion, or county auditor value. This becomes your tax basis.

What you expect the buyer to pay before any commissions or closing costs.

Realtor commission (typ. 5–6%), title fees, transfer tax, attorney fees. Cash sales typically cost less.

Used only to show how much the stepped-up basis is saving you compared to a lifetime gift or carryover scenario.

MFJ (TY 2026 projected): 0% LTCG up to ~$96,700 taxable income; 15% to ~$600,050; 20% above. The 3.8% NIIT applies once MAGI exceeds $250,000. Pick the row that best fits your total household income — the calculator uses the rate you select.

If you inherited the property jointly with siblings (e.g., 50/50 with one sibling, enter 50). Default 100%.

Estimates only. Tax law changes; brackets shown are for tax year 2026. Not tax, legal, or estate-planning advice.

Estimated Tax Bill
$1,573

You will keep $256,928 of your $258,500 share after tax.

Stepped-Up Basis Savings (IRC § 1014)

Without stepped-up basis, this same sale would have cost you about $35,798 in federal + Ohio tax (using the original $65,000 basis). You save approximately $34,225 because the basis stepped up to the date-of-death FMV. This is the single largest tax benefit of inheriting property versus receiving it as a lifetime gift.

How the Tax Was Calculated

Sale price$275,000
Selling expenses− $16,500
Amount realized$258,500
Stepped-up basis (FMV at death × your share)− $250,000
Capital gain (or loss)+$8,500
Federal LTCG tax (15%)$1,275
Ohio income tax (top rate ~3.50%)$298
Total tax$1,573
Net to you$256,928

What heirs usually overlook

Holding the house while it sits empty
  • $80–$200/mo vacant-home insurance (vs. $40 occupied)
  • $60–$150/mo utilities to keep pipes from freezing
  • $40–$120/mo lawn, snow, and exterior upkeep
  • Continued property tax accrual (Montgomery County average ~1.9%)
  • Risk of vandalism, copper theft, vagrant entry
  • Multi-heir disputes over carrying costs
Selling fast for cash
  • Close in 7–21 days vs. 60–120 days retail
  • Zero realtor commission, zero closing costs
  • No repairs, no clean-out, no inspection drama
  • Same federal/Ohio tax treatment — stepped-up basis applies either way
  • One settlement statement to split between heirs
  • Closes the chapter so the family can move on

Ready to close the estate?

Mike Wall has bought 300+ Dayton-area homes since 2016 — including dozens through probate, with out-of-state heirs, and across multiple beneficiaries. Get a no-obligation cash offer in 15 minutes.

How this calculator works

The math here follows the same path your CPA walks at tax time when you sell inherited Ohio real estate:

  1. Amount realized = sale price − selling expenses (commissions, closing costs, transfer tax, attorney fees).
  2. Stepped-up basis = fair market value on the date of the decedent's death, per Internal Revenue Code § 1014(a)(1). The executor may instead elect the alternate valuation date six months later under IRC § 2032, but only if it would reduce both the gross estate and the estate-tax liability — rare for non-taxable estates.
  3. Capital gain (or loss) = amount realized − stepped-up basis. Per IRC § 1223(9), this is automatically long-term capital gain regardless of how long you held the property after death.
  4. Federal capital-gains tax = gain × your LTCG bracket rate (0%, 15%, or 20%) per IRC § 1(h). Bracket thresholds for tax year 2026 are projected from the most recent IRS inflation adjustments.
  5. Net Investment Income Tax = an additional 3.8% on the gain if your MAGI exceeds the threshold ($200K single / $250K married filing jointly / $200K head of household) per IRC § 1411. These thresholds are NOT inflation-adjusted.
  6. Ohio income tax = gain × the applicable Ohio bracket rate. After House Bill 33, the top marginal rate is 3.5% on income above $100,000 and 2.75% between $26,051 and $100,000. We apply 3.5% as a conservative estimate — many heirs in lower brackets will owe less.

The calculator does not model: federal estate tax (the 2026 exemption of ~$13.99M means almost no Ohio estates owe it); Ohio estate tax (repealed effective 2013); generation-skipping transfer tax; the IRC § 121 personal-residence exclusion (inherited property doesn't qualify unless the heir occupies it as a primary residence for 2 of the 5 years before sale); the alternate valuation date election; or capital improvements you make after inheriting that would further increase your basis.

If you received the property by an outright lifetime gift or quitclaim deed before death, you may instead have carryover basis under IRC § 1015 — meaning your basis is the decedent's original purchase price plus any improvements they made, NOT the date-of-death FMV. That dramatically increases the taxable gain. Two important Ohio-specific exceptions that DO preserve stepped-up basis: (1) Ohio's transfer-on-death affidavit under ORC § 5302.22, because the legal transfer happens at death; and (2) property held in a revocable living trust, because the assets remain in the gross estate under IRC § 2038 and qualify for the § 1014 basis adjustment. Irrevocable trusts are a separate and more complex matter — always confirm with a tax professional before relying on basis treatment.

Important: This is a planning tool, not tax or legal advice. Federal and Ohio tax law change every year. Always consult a CPA or estate attorney before signing a sale contract — especially for multi-heir situations, properties held in trust, gifts received before death, or sales involving installment notes.

Data sources

  • 26 U.S.C. § 1014 — basis of property acquired from a decedent (stepped-up basis)
  • 26 U.S.C. § 1223(9) — automatic long-term holding period for inherited property
  • 26 U.S.C. § 1(h) — capital-gains rate brackets (0% / 15% / 20%)
  • 26 U.S.C. § 1411 — Net Investment Income Tax (3.8% NIIT)
  • 26 U.S.C. § 1015 — basis of property received by gift (carryover basis)
  • 26 U.S.C. § 121 — exclusion of gain on principal residence
  • 26 U.S.C. § 2032 — alternate valuation date election
  • 26 U.S.C. § 2010 — federal estate-tax unified credit / exemption
  • Ohio Revised Code § 5302.22 — transfer-on-death designation affidavit
  • Ohio Revised Code § 5747.02 — Ohio personal income-tax rates (as amended by HB 33)
  • IRS Publication 559 — Survivors, Executors, and Administrators
  • IRS Publication 551 — Basis of Assets
  • Ohio Department of Taxation — individual income-tax brackets and rates

Free help for Ohio heirs and executors

Inherited-property tax questions, answered

Do I have to pay capital-gains tax on a house I inherited?
Often very little — and sometimes zero. Under Internal Revenue Code § 1014, your tax basis in inherited property 'steps up' to the fair market value on the date of the decedent's death. If you sell shortly after inheriting, the gain is calculated against that stepped-up basis, not what your relative originally paid. So a home grandma bought for $40,000 in 1978 and that was worth $250,000 the day she died has a $250,000 basis in your hands. Sell it for $260,000 and your taxable gain is roughly $10,000 minus selling costs, not $220,000.
What is stepped-up basis and why does it matter so much?
Stepped-up basis is the rule in IRC § 1014 that resets the cost basis of inherited assets to their fair market value on the decedent's date of death (or the alternate valuation date six months later, if the executor elects it). It is one of the largest tax breaks in the federal code for middle-class families. Without it, every dollar of appreciation across a lifetime — sometimes 40 or 50 years of Ohio home-price growth — would become taxable when the heir sold. With it, the entire pre-death gain is wiped out for income-tax purposes. For most Ohio inherited homes selling at or near the date-of-death appraisal, the federal capital-gains tax is $0.
How long do I have to hold an inherited property before selling to get long-term capital-gains rates?
You don't have to wait at all. Internal Revenue Code § 1223(9) treats inherited property as long-term capital gain regardless of how briefly you owned it. Sell the day after the funeral and any taxable gain still qualifies for the preferential 0% / 15% / 20% LTCG rates rather than your ordinary-income tax bracket. This rule alone can save heirs in the top federal bracket roughly 17 percentage points of tax compared to a short-term sale of property they bought themselves.
Does Ohio tax the sale of an inherited house?
Ohio has no state-level capital-gains tax structure separate from its income tax — capital gains are simply included in your Ohio adjusted gross income and taxed at the regular brackets. After House Bill 33 (eff. 2024), Ohio's top marginal rate is 3.5% on income above $100,000 and 2.75% between $26,050 and $100,000. If your gain is $50,000, expect roughly $1,500–$1,750 of Ohio income tax on top of any federal liability. Ohio repealed its estate tax in 2013, so there is no separate Ohio death-tax bill on top of the income tax on the gain.
Will the estate owe federal estate tax on the house?
Almost certainly not. The 2026 federal estate-tax exemption is approximately $13.99 million per individual (and double for married couples with proper portability elections). Less than one in 800 American estates file an estate-tax return at all. For nearly every Ohio family, the entire estate — house, retirement accounts, life insurance — passes free of federal estate tax. Stepped-up basis still applies at the same time, which is what makes inheriting a home so tax-friendly compared to receiving it as a lifetime gift.
What if the property was deeded to me before death (gift, transfer-on-death deed, or quitclaim)?
This is the trap door, and it costs heirs a fortune every year. Property transferred to you while the owner was still alive — by outright gift deed or quitclaim — generally takes a CARRYOVER basis under IRC § 1015. You inherit the original purchase price, not the date-of-death FMV. Same $40,000 grandma-bought-in-1978 home, but if she deeded it to you in 2010 instead of leaving it through her will, your basis is $40,000 and your gain on a $260,000 sale is $220,000 — fully taxable. Two important Ohio-specific exceptions that DO preserve stepped-up basis: (1) a transfer-on-death affidavit under ORC § 5302.22 — the transfer doesn't legally happen until death, so § 1014 step-up applies; and (2) property held in a revocable living trust — because the grantor retained the power to revoke, the assets are includible in the gross estate under IRC § 2038 and qualify for the § 1014 basis adjustment. Irrevocable trusts are a different and more complex story. Always consult a tax professional or estate attorney before signing anything that transfers title.
Are selling expenses, repairs, and probate fees deductible?
Selling expenses (real-estate commissions, title fees, transfer tax, attorney fees, recording fees) are deducted from the sale price to arrive at the 'amount realized,' which directly reduces your taxable gain. That is why this calculator subtracts them from your sale price up front. Repairs to make the home sellable are generally NOT deductible — the IRS treats them as personal expenses unless you held the property as a rental or investment. Capital improvements you make after inheriting (a new roof, a kitchen remodel) DO add to your basis and reduce gain. Probate and estate-administration fees paid by the estate (not by you personally) are deductible on the estate income-tax return (Form 1041), not on your individual return.
How does selling to a cash buyer change the tax math?
The federal and Ohio tax rates do not change — but two things often improve your net. First, selling-expense deductions are typically lower because there are no agent commissions and no traditional closing costs (we cover them at EZ Sell Homebuyers). Lower expenses mean a slightly higher gain on paper, but you also keep more of the sale price in your pocket. Second, the timeline shrinks from 60–120 days to 7–21 days, which often matters more than tax mechanics — every month an inherited house sits empty costs roughly $300–$800 in carrying costs (insurance, utilities, lawn, security, property tax). For out-of-state heirs and multi-heir estates that want to close the chapter cleanly and split proceeds, a fast cash close usually beats waiting for the right retail buyer.
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