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If you rent your inherited house, your capital gains tax is higher. If you inherit a house that you don't want to live in, you can sell the house or rent it out. If the market's flat right in your area, renting may be the better financial option.It will have an effect on your taxes, though, so take that into account when choosing your options.eassessment. Whether you rent or live in the house, you may see higher property taxes than the former owner. California law limits increases in assessed value to 2 percent a year. When the house changes hands, it gets reassessed to its real worth.
How the ownership is listed on the deed of the house. If you own the house as joint tenants with right of survivorship, when one of you dies, the other automatically inherits the entire house. If you own the house as tenants in common, when one of you dies that person's share of the house goes to whomever he or she names in a will or trust. If the deceased person does not have a will or trust, his or her portion of the house will go to blood relatives according to state law. How much of the house each partner owns. Additionally, you should include how any portion of the home can be transferred between the partners. For example, if the one who owns less can acquire more by making improvements or mortgage payments, this should be specified in the agreement. The buyout rights, if any, and how the house will be appraised.