Selling Inherited Commercial Property in Florida
Inheriting a commercial building usually means inheriting decisions you never planned to make: tenants calling someone who is gone, insurance renewals, property tax notices, and siblings with different ideas. The good news is that the tax code is unusually kind to heirs who sell, and a clear sequence turns the mess into a plan.
If you inherited commercial property in Florida, you generally receive a step-up in basis to fair market value at the date of death, which can dramatically reduce capital gains tax if you sell soon after. Before selling, confirm who has legal authority to sign (probate or trust administration decides this), get a date-of-death valuation documented, and stabilize the property's income. Then decide between selling, holding, or a 1031 exchange. Consult a probate attorney and CPA; the sequencing matters.
The situation, handled properly.
The step-up in basis is the single most important fact for heirs. Your basis generally resets to the property's fair market value at the date of death, wiping out the appreciation and depreciation recapture the original owner would have owed tax on. Sell near that value soon after, and the taxable gain can be minimal. This is why a documented date-of-death valuation is not paperwork; it is the foundation of your tax position. This is general information, not tax advice; confirm the specifics with your CPA.
Authority comes before marketing. If the property passes through probate, the personal representative needs letters of administration before signing a listing or contract; Florida formal administration commonly runs several months. Property held in a trust or an LLC with a survivorship plan can often move much faster. A probate attorney should confirm who signs before anyone lists anything, and we work alongside them routinely.
While the legal process runs, the building still operates. Rents need collecting, insurance must not lapse (carriers cancel on vacancy and on deceased named insureds), and tenants need a point of contact. We frequently step in during administration to stabilize operations and prepare the property for sale, so that when authority is confirmed the marketing starts the same week. Where multiple heirs disagree, a professional valuation and a clean marketed process is usually what gets everyone to yes.
Step-up in basis
Basis resets to date-of-death fair market value, often eliminating most of the taxable gain on a prompt sale. Document the valuation properly; it is the number the IRS sees.
Authority to sell
Probate letters, trustee powers, or LLC succession documents decide who can sign. Confirm authority first; contracts signed without it do not close.
Keep it operating
Insurance lapses, unpaid taxes, and drifting tenants destroy value during administration. Stabilizing income protects the price you eventually get.
Frequently asked
Do I pay capital gains tax on inherited commercial property?
Usually far less than people fear. The step-up in basis resets your cost basis to fair market value at the date of death, so selling near that value shortly after produces little taxable gain. Gains accrue only on appreciation after the date of death. Confirm your specific situation with a CPA; this is general information, not tax advice.
Can I sell a property that is still in probate?
Often yes, with the right sequence. The personal representative can typically contract to sell once letters of administration issue, and in some cases with court approval during administration. Your probate attorney sets the sequence; we handle valuation, marketing, and buyers in parallel so no time is lost.
What if my siblings and I disagree about selling?
Start with an independent valuation everyone can see; most standoffs are really disagreements about the number. One heir can also buy out the others at the appraised value. Where no agreement is possible, a partition action forces a sale, but it is the expensive last resort. A clean marketed process with transparent offers resolves most family disputes.
Should we keep the building and collect rent instead?
Sometimes. Ask whether you would buy this building today at its current value; inheriting it does not make it a good hold. Age of the building, deferred maintenance, management burden across multiple heirs, and the tax-free exit the step-up offers all weigh in. We give estates a straight hold-versus-sell analysis with real numbers.
The property was the family business location too. Can both be sold together?
Yes, and often for more than separately. An operating business plus its real estate sells as a package to owner-operator buyers. See our business brokerage service for how packaged sales work for estates.
Find out what it is worth first.
A free, no-obligation valuation from the broker who works this market daily. If the number works, we talk process. Either way you get a real answer within one business day.