Do Heirs Pay Capital Gains Tax on an Inherited Home in Fulshear, TX?

Katie Curran

Oct 7

6 min read

Brick single-family home in Fulshear, TX with a for-sale sign, representing an inherited home sale in Fort Bend County

Usually little or none. Heirs generally get a stepped-up basis equal to the home's value on the date of death, so only gain after that date is taxed. Texas has no inheritance tax.

TL;DR:

If you inherit a home in Fulshear, TX (Fort Bend County, Greater Houston), you generally owe federal capital gains tax only on growth after the date of death, because the IRS resets your basis to fair market value on that day. Texas doesn't tax inheritances. The number that matters is the date-of-death value, and it isn't the Fort Bend CAD value. Katie Curran of MKAT Group, Keller Williams Signature, explains how to document it before you sell.

This guide is for heirs and executors selling an inherited home in Fulshear, Texas. Fulshear sits in Fort Bend County, part of the Greater Houston area. Katie Curran, a REALTOR® with MKAT Group at Keller Williams Signature, works on probate and estate sales across Fort Bend County. It covers the federal tax rule, how the date-of-death value gets set, and where local details come in. It's general information, not tax advice.

What Is a Stepped-Up Basis on an Inherited Home in Fulshear, TX?

Basis is the starting number the IRS uses to measure your gain when you sell. For an inherited home, that number is generally reset to the home's fair market value on the date the owner died, not what they paid decades ago. If the house sells for more than that value, you owe tax on the difference. If it sells for the same or less, there's generally no taxable gain. The rule works the same for a Fulshear home as it does anywhere in the country.

Do Heirs Pay Capital Gains Tax on an Inherited Home in Fulshear, TX?

Usually only on growth after the date of death. According to the IRS, the basis of inherited property is generally its fair market value on the date of death, and you owe tax only if you sell for more than that basis. The decades of appreciation before the owner died don't pass to you.

Does Texas Have an Inheritance Tax?

No. Texas doesn't tax what you inherit, and it has no state estate tax. The federal estate tax is a tax on the estate, not on heirs, and it applies only above the exemption. Kiplinger reports the 2026 federal exemption at $15 million per person, so most estates fall well below it. If an estate does file a federal estate tax return, the IRS says the value reported there can control your basis.

Is an Inherited Home Sale a Short-Term or Long-Term Gain?

Long-term, even if you sell within weeks. H&R Block notes that inherited property is automatically treated as held for more than one year, so any gain gets long-term rates, which are lower than ordinary income rates.

How Is the Date-of-Death Value Set for a Fulshear Home?

It's a fair market value on one specific day, which makes it a valuation question more than a tax question. If you're selling an inherited home through probate, settle that number before the house is priced.

Is the Fort Bend CAD Value the Same as the Date-of-Death Value?

No, and the gap catches people. Texas Property Tax Code Section 23.01 has appraisal districts value property as of January 1 each year. The Fort Bend Central Appraisal District's number reflects the market on January 1, not the day the owner died. Homesteads add another layer. The Harris Central Appraisal District explains that a homestead's appraised value can sit below its market value because of the annual 10% cap. A CAD notice is a starting reference. It isn't your basis.

Who Decides the Date-of-Death Value, and Do You Need an Appraisal?

For the probate inventory, the executor lists fair market values, and SimplyTrust's Fort Bend County guide, citing the Texas Estates Code, says no independent appraiser is required. Taxes are a separate track. The IRS can ask you to support the basis you report, so a licensed appraiser's date-of-death report is the cleaner record. Ask your CPA or estate attorney whether the estate needs one.

I'm not a tax professional, so I don't give tax advice. I do make sure a date-of-death value gets documented before we list, so your CPA has something solid to work from.

What Does the Math Look Like When a Fulshear Inherited Home Sells?

Here's an illustration only. These aren't figures from a real sale.

Date-of-death value from an appraiser: $400,000
Fort Bend CAD value on the tax notice: $360,000
Sale price: $450,000
Seller's closing costs and commission: $27,000

Using the appraised value: $450,000 minus $27,000 is $423,000, minus the $400,000 basis, for a $23,000 gain. Using the CAD value as the basis: the gain becomes $63,000. That's $40,000 of gain that doesn't exist.

Do Selling Costs Reduce the Taxable Gain?

Generally yes. Commission and closing costs paid by the seller usually reduce the amount realized, which shrinks the gain. Your CPA confirms what qualifies.

How Does Fulshear Compare to Katy for Inherited Home Sales?

The federal tax rule is identical. What changes is which local offices touch the sale.

County: Fulshear sits in Fort Bend County. Katy spans Harris, Fort Bend, and Waller counties.
Appraisal district: Fulshear parcels go through the Fort Bend Central Appraisal District. A Katy parcel depends on its county: Harris Central Appraisal District, Fort Bend Central Appraisal District, or Waller County Appraisal District.
Probate court: Fort Bend County hears probate in its County Courts at Law at the Justice Center in Richmond, with no dedicated statutory probate court. Harris County uses statutory probate courts.
Capital gains rule: Federal in both places, and identical.

Does the Answer Change if the Home Is in Katy Instead?

The tax answer doesn't change. The paperwork does. A Katy address can fall in Harris, Fort Bend, or Waller County, so confirm the parcel's county before you pull a CAD value. Harris Central Appraisal District, Fort Bend Central Appraisal District, and Waller County Appraisal District each set their own values. Probate is typically filed where the owner lived, so confirm that before you plan a timeline.

Why Does This Matter for Heirs and Executors in Fulshear, TX?

Most of the tax exposure on an inherited home comes from one avoidable mistake: using the wrong value. If the basis is documented as of the date of death, a prompt sale usually leaves little or no taxable gain. If it's rebuilt later from a CAD notice, you can end up reporting gain that never existed, or lack records if the IRS asks. Values move during the year, so a January 1 CAD figure can sit months away from the market on the date of death. A value set early also keeps co-heirs working from one number if they disagree about price.

What Am I Seeing in the Fulshear, TX Market Right Now?

Heirs usually ask what the house will sell for before they ask what it was worth on the day the owner died. Those are two different numbers, and the second one sets your tax. When we talk before listing, I push to get the date-of-death value in writing first. It costs little to document at the start and takes real effort to reconstruct after closing. My job is to make sure the sale price and the paperwork give your CPA clean numbers to work with.

Who Is This Guide For in Fulshear, TX?

You're an executor preparing to list a Fulshear home that belongs to the estate
You're an heir who just learned you'll inherit a Fulshear house and want to know what a sale could cost in tax
You're co-heirs deciding whether to sell, split proceeds, or buy one another out
You're comparing a sale now with keeping the house as a rental first
You're handling a Fulshear sale from out of town

Katie Curran is a REALTOR® with MKAT Group at Keller Williams Signature, serving probate and estate sales in Fulshear, Fort Bend County, the Greater Houston Area, and across Texas.

Related Resources

Work with us: probate and estate home sales in Greater Houston

Community guides: Why Katy probate spans three counties · How Fulshear probate cases are heard in Fort Bend County