Quick answer (as of November 2026) No. Tennessee's inheritance tax doesn't apply to anyone who died in 2016 or later. The Tennessee Department of Revenue says the tax "is no longer imposed after December 31, 2015," and the state doesn't collect an estate tax either. The federal estate tax only reaches estates worth more than $15,000,000 for deaths in 2026. An inherited house usually takes a new tax basis equal to its value on the date of death, so selling it near that value often leaves little or no gain to tax. Talk to a tax professional about your own situation.
Somebody at the funeral lunch told you the state is going to take a cut of the house. In Tennessee it won't. The state stopped collecting its inheritance tax for deaths after December 31, 2015, and nothing replaced it.
You still have three things to sort out: federal tax if you sell, the county property tax bill that keeps coming, and who can legally sign the deed. This page walks through each one.
I'm a Realtor, not a CPA or an attorney. I've been selling real estate since 2013, investing in it since 2005, and I've been part of more than 500 transactions. Everything below comes from the Tennessee Department of Revenue, the Tennessee Code, the county courts and the IRS. Your CPA and your probate attorney get the last word on your family's situation.
Does Tennessee have an inheritance tax?
No. Tennessee has no inheritance tax for anyone who died on or after January 1, 2016. The Tennessee Department of Revenue says the tax "is no longer imposed after December 31, 2015," and it tells executors not to file a return for deaths in 2016 or later.
The statute says the same thing. Tennessee Code § 67-8-318 says the inheritance tax part of the code "does not apply in the case of any decedent who died in 2016 or in any subsequent year." If someone in the family is quoting a percentage the state will take, they're working from rules that ended a decade ago.
What was Tennessee's inheritance tax before 2016?
Before 2016, Tennessee taxed the net estate of a person who died above an exemption that rose in steps until the tax ended. Despite the name, it was charged against the estate as a whole and paid out of the estate by the executor, administrator or trustee. It was due nine months after the death.
| Year of death | Tennessee inheritance tax exemption |
|---|---|
| 2006 to 2012 | $1,000,000 |
| 2013 | $1,250,000 |
| 2014 | $2,000,000 |
| 2015 | $5,000,000 |
| 2016 and later | No Tennessee inheritance tax |
Source: Tennessee Department of Revenue, inheritance tax exemptions, as of November 2026. Above the exemption, the rates ran from 5.5 percent on the first $40,000 to 9.5 percent on amounts of $440,000 and over.
This still matters if the house came from someone who died in 2015 or earlier and the estate was never settled. The Department of Revenue's rule is that a decedent's real property isn't to be transferred without the Commissioner's consent, and that the person in control of the property can be held personally liable for any inheritance tax due. The department still takes consent applications for deaths before 2016. If you're selling a house from an older estate, raise it with your probate attorney before you list.
Does Tennessee have an estate tax or a gift tax?
No. Tennessee doesn't collect an estate tax, and its gift tax was repealed effective January 1, 2012. On the Department of Revenue's list of taxes, the gift tax, the Hall income tax and the inheritance tax all sit under "Archived Taxes," and no estate tax appears anywhere on the list.
The Hall income tax, which taxed interest and dividends, was repealed for tax periods beginning on or after January 1, 2021. Tennessee doesn't tax wages either, so there's no Tennessee tax on the gain when you sell an inherited house. Federal tax is a separate question, covered below.
What is the federal estate tax exemption for 2026?
For a death in 2026, the federal estate tax exclusion is $15,000,000. The IRS says the law signed on July 4, 2025, Public Law 119-21, raised the basic exclusion amount to $15,000,000 for calendar year 2026. For a death in 2025 the filing threshold was $13,990,000.
The IRS describes the estate tax as "a tax on your right to transfer property at your death," so it's figured on the whole estate, not on what each heir gets. It starts with the fair market value of everything the person owned, real estate included, then subtracts deductions such as mortgages and other debts, estate administration expenses, and property passing to a surviving spouse or a qualified charity.
Most estates never file a federal estate tax return. A return is required when the gross estate, plus adjusted taxable gifts and the specific gift tax exemption, is worth more than the filing threshold for the year of death. A surviving spouse can also elect to receive the unused exemption, but only on a timely filed estate tax return, so ask the estate's CPA about that even when no tax is owed. Source: IRS, Estate tax.
Talk to a tax professional about whether the estate you're handling needs to file.
Tax figures on this page are the federal rules as published for 2026 and are for planning only. I am a licensed Realtor (TREC 369038), not a tax professional or a lender. Confirm your own situation with a CPA, and any borrowing limit with your lender, before you rely on a number.
How much can you inherit in Tennessee without paying taxes?
There's no Tennessee tax on what you inherit, at any amount, under the law as of November 2026. On the federal side, IRS Publication 525 says that in most cases property you receive as an inheritance isn't included in your income. You do owe tax on what the property earns after it's yours, like rent, and on any gain when you sell it. The federal estate tax only comes into play when the whole estate is worth more than $15,000,000 for a 2026 death. Your CPA confirms how this applies to you.
What is the stepped-up basis on an inherited house?
An inherited house usually takes a new tax basis equal to its fair market value on the date the owner died, not what they paid for it. That's the general rule in IRS Publication 551, with one option: the personal representative can choose the alternate valuation date instead. IRS Publication 523 adds that if a federal estate tax return was filed or required, the value listed on that return is your basis.
Here's what that does to the math. The numbers are made up to show how it works.
| Example | With the step-up | Without it |
|---|---|---|
| What your mother paid years ago | $150,000 | $150,000 |
| Value on the date she died | $600,000 | not used |
| Your basis | $600,000 | $150,000 |
| Sale price | $640,000 | $640,000 |
| Selling costs (commission, advertising, legal fees) | $35,000 | $35,000 |
| Amount realized | $605,000 | $605,000 |
| Taxable gain | $5,000 | $455,000 |
A few situations change the rule, and your CPA should hear about any of them:
- A home owned jointly with a surviving spouse. Only the half that belonged to the spouse who died gets the new basis. The survivor's own half keeps its old basis.
- A home owned in a community property state. Publication 523 lists Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington and Wisconsin. When either spouse dies, the full fair market value usually becomes the basis of the whole property, as long as at least half of it is included in the estate. I moved here from California myself, so if your parents' house was out there, ask your CPA about this one.
- A house you gave to the person within a year of their death. If you or your spouse gave them the property in that last year, you get their old basis back, not the date-of-death value.
Talk to a tax professional before you settle on a basis number, because the gain on any sale is figured from it.
Do you pay capital gains tax when you sell an inherited house in Tennessee?
Only federal tax, and only on the gain above your stepped-up basis. Tennessee doesn't tax the gain. The IRS treats inherited property as held for more than one year "regardless of how long you actually held it," so any gain gets the long-term capital gains rates of 0, 15 or 20 percent depending on your taxable income.
Sources: IRS Publication 544 and IRS Topic 409.
Your gain is the amount realized minus your basis. The amount realized is the sale price minus selling expenses such as the real estate commission, advertising and legal fees. If you move into the house and make it your main home, you may later qualify for the home sale exclusion of up to $250,000, or $500,000 on a joint return, once you've owned it and lived in it for at least 24 months of the five years before the sale (IRS Topic 701).
My guide to capital gains tax on a home sale in Tennessee has the 2026 brackets and a full worked example. Talk to a tax professional before you sign a listing agreement, since the tax depends on the rest of your income that year.
Tax figures on this page are the federal rules as published for 2026 and are for planning only. I am a licensed Realtor (TREC 369038), not a tax professional or a lender. Confirm your own situation with a CPA, and any borrowing limit with your lender, before you rely on a number.
Do you owe Tennessee property tax on an inherited home?
Yes. The county property tax keeps running no matter who owns the house or whether the estate is settled. Under Tennessee Code § 67-5-2101, property taxes become "a first lien upon such property from January 1 of the year for which such taxes are assessed," so an unpaid bill follows the house to the closing table.
Tennessee assesses a home at 25 percent of its appraised value (Tennessee Code § 67-5-801), and the rate depends on the county and on whether the house is inside a city. Spring Hill is a good example: it sits in both Williamson and Maury County, so which county's rate applies depends on which side of the line the house is on. My Spring Hill property tax guide shows how that plays out.
If your parent had state property tax relief, which is set up for low-income elderly and disabled homeowners and for disabled veteran homeowners or their surviving spouses, don't assume it continues once the house passes to you. Applications go through the county trustee or the city's collecting official, and the Comptroller's Tax Relief section decides who qualifies, so call the trustee's office and ask.
Property tax figures are the county and city rates published for the year shown and are for planning only. Your actual bill depends on the assessed value, any exemptions and the city or district the home sits in. Confirm with the county assessor or trustee and your tax professional before you rely on a number.
Do you have to go through probate to sell an inherited house in Tennessee?
It depends on the will. Under Tennessee Code § 31-2-103, real property passes at death to the heirs when there's no will, or to the beneficiaries named in the will, unless the will says the house is to be administered as part of the estate. Your probate attorney tells you which court step, if any, your family needs before the house can be sold.
The three routes Tennessee families hear about most:
- A full estate. The court issues letters testamentary (with a will) or letters of administration (without one) to the personal representative, who then handles the estate.
- Muniment of title. Under Tennessee Code § 32-2-111, a will can be probated just to establish title to real estate, without letters or a full administration. It only works when there's a will.
- A small estate. Tennessee's small estate process covers up to $50,000 of probate property, but the statute counts personal property only (§ 30-4-102). It won't move a house.
Which route fits is a question for a Tennessee probate attorney, and the title company will tell you whose signatures it needs to close. Here's where probate is filed in the three counties I work, as of November 2026.
| County | Court that handles probate | Where |
|---|---|---|
| Williamson (Franklin, Thompson's Station, part of Spring Hill) | Chancery Court | Williamson County courthouse, 135 4th Avenue South, Franklin (county court page) |
| Maury (Columbia, part of Spring Hill) | Chancery Court, Clerk and Master | Maury County Judicial Building, 1115 S. Main St., Columbia. Filings are dropped off or mailed; no e-filing (2026 probate procedures) |
| Davidson (Nashville) | Seventh Circuit Court, Probate Division | Probate Court Clerk, 1 Public Square, Suite 302, Nashville (clerk's page) |
Maury County's own probate procedures strongly recommend hiring an attorney for any probate matter, and the clerk's staff can't give legal advice. For a Franklin house, my guide to selling inherited property in Franklin goes deeper on Williamson County, the creditor deadlines and the first week after a death.
Should you sell, keep or rent an inherited house?
Selling makes sense when nobody in the family wants to live in it or manage it. If you sell near the date-of-death value, the stepped-up basis keeps the taxable gain small, and the insurance, upkeep and tax bills stop at closing. Keeping or renting it works when someone wants that job. Here's how the three compare.
| Sell | Move in and keep it | Rent it out | |
|---|---|---|---|
| Federal tax | Gain above your stepped-up basis, at long-term rates | No tax until you sell; the home sale exclusion may apply after 2 of 5 years owned and lived in | Rent is taxable income; you depreciate the house from when it's placed in service |
| Tennessee tax | None on the gain | County and city property tax every year | County and city property tax every year |
| Basis | Date-of-death value, in most cases | Date-of-death value, in most cases | For depreciation, the lower of its value or your basis on the day it becomes a rental |
| Later sale | Not applicable | Gain above the exclusion is taxed | The depreciation portion can be taxed at up to 25 percent |
| Your ongoing costs | Stop at closing | Insurance, upkeep, property tax | Insurance, upkeep, property tax, vacancy and repairs |
Talk to a tax professional before you pick one. My guide on whether to sell or rent your house walks through the rental side in more detail.
If you're leaning toward selling, or the family just needs a number before anyone decides, DM me, text or call 615-392-1186. I'll walk the house for free and give you a price based on real sold comps, and I can pull sales from around the date of death so you and your CPA have a starting point for the basis. If the CPA wants a formal appraisal, that comes from a licensed appraiser. If the house needs more work than the family wants to take on, I can also bring you cash offers from the two cash offer platforms I use, so you can compare them with a listing side by side.
Prefer to start online? Request a free home evaluation. If the family would rather sell it themselves, my guide to selling a house by owner in Tennessee lays out each step.
Moving to Tennessee: does the state tax what you leave your family?
No. As of November 2026, Tennessee has no inheritance tax, no estate tax and no gift tax, so the only death tax that can reach your estate is the federal one, which applies the same way in every state. Your home here will still carry county property tax.
If you're bringing a will or a trust from another state, ask a Tennessee estate attorney whether it needs updating after the move. My moving to Tennessee guide covers the rest of the tax picture, and if you're coming from California, start with moving from California to Tennessee.
Whether you've inherited a house here or you're planning a move, I'm happy to talk it through. DM me, text or call 615-392-1186.
Frequently asked questions
Does Tennessee have an inheritance tax in 2026?
No. Tennessee has no inheritance tax for anyone who died on or after January 1, 2016. The Tennessee Department of Revenue says the tax "is no longer imposed after December 31, 2015," and it tells executors not to file a return for deaths in 2016 or later.
Does Tennessee have an estate tax?
No. Tennessee doesn't collect an estate tax, and its gift tax was repealed effective January 1, 2012. On the Department of Revenue's list of taxes, the gift tax, the Hall income tax and the inheritance tax all sit under "Archived Taxes," and no estate tax appears anywhere on the list.
How much can you inherit in Tennessee without paying taxes?
There's no Tennessee tax on what you inherit, at any amount, under the law as of November 2026. On the federal side, IRS Publication 525 says that in most cases property you receive as an inheritance isn't included in your income. You do owe tax on what the property earns after it's yours, like rent, and on any gain when you sell it. The federal estate tax only comes into play when the whole estate is worth more than $15,000,000 for a 2026 death. Your CPA confirms how this applies to you.
Do you pay capital gains tax when you sell an inherited house in Tennessee?
Only federal tax, and only on the gain above your stepped-up basis. Tennessee doesn't tax the gain. The IRS treats inherited property as held for more than one year "regardless of how long you actually held it," so any gain gets the long-term capital gains rates of 0, 15 or 20 percent depending on your taxable income.
What is the federal estate tax exemption for 2026?
For a death in 2026, the federal estate tax exclusion is $15,000,000. The IRS says the law signed on July 4, 2025, Public Law 119-21, raised the basic exclusion amount to $15,000,000 for calendar year 2026. For a death in 2025 the filing threshold was $13,990,000.
Do you have to go through probate to sell an inherited house in Tennessee?
It depends on the will. Under Tennessee Code § 31-2-103, real property passes at death to the heirs when there's no will, or to the beneficiaries named in the will, unless the will says the house is to be administered as part of the estate. Your probate attorney tells you which court step, if any, your family needs before the house can be sold.
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