The Short Answer

In Florida, taxes connected to an inherited home sale are typically handled in two different “buckets”: (1) estate-level taxes and debts that the personal representative must address before distributing assets, and (2) income/capital gains taxes that may be owed by the estate or the beneficiary depending on who owned the property at the time of sale.

Who pays and when payment is due depends on whether the property is sold by the estate during probate or after it is distributed to heirs/beneficiaries—and whether any Florida estate tax filing/liability issues apply.

What Florida Law Says

Florida probate law puts the personal representative in charge of settling the estate, which includes addressing valid expenses and obligations before making distributions. If taxes are owed that attach to the estate, distributing property too early can create personal risk for the personal representative.

The Statute

The primary law governing this issue is Fla. Stat. § 198.23.

This statute provides that if a personal representative distributes estate property without paying or securing Florida estate tax (or obtaining a release from the tax lien), the personal representative can become personally liable for the unpaid tax.

Why You Should Speak with an Attorney

Even when the “tax question” sounds simple, inherited real estate sales often turn into a mix of probate administration, title issues, and tax allocation questions. Legal outcomes often depend on:

• Strict Deadlines: If a Florida estate tax return is required in a particular estate, Florida law ties the state filing deadline to the federal estate tax return deadline. See Fla. Stat. § 198.13.
• Burden of Proof: Whether the estate or an individual beneficiary owes income tax on the sale can hinge on who held title at closing (estate vs. beneficiary), the date-of-death value, and what documentation exists to support basis and expenses.
• Exceptions: The personal representative’s duty to pay estate obligations follows statutory priorities, and some obligations can outrank others. See Fla. Stat. § 733.707. Missteps can create disputes among beneficiaries or creditor problems.

Trying to handle this alone can lead to avoidable tax exposure, delays in closing, or distributions that trigger personal liability for the person administering the estate.

Get Connected with a Florida Attorney

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Disclaimer: This article provides general information under Florida law and does not create an attorney-client relationship. Laws change frequently. For legal advice specific to your situation, please consult with a licensed attorney.