Texas transfer paths and the federal basis rule for heirs
Selling an Inherited Home in The Woodlands: Muniment, Heirship and Tax Basis
Updated November 2026
How do heirs sell an inherited house in The Woodlands, and do they pay tax on the sale?
In October 2026, heirs selling a Woodlands house may take title without formal administration, and the IRS treats a sale above the inherited basis as taxable gain.
Paige Martin, Houston Properties Team, The Woodlands
Source: Texas State Law Library, Probate Law guide: Informal Methods, September 2026.
How does title pass to the heirs without a formal administration in Texas?
The Texas State Law Library's probate guide describes informal methods for moving a home to the heirs without formal administration. The routes it lists include muniment of title, a determination of heirship, an affidavit of heirship and a family settlement agreement.
Muniment of title depends on a will. Where there is one, the guide says it may be possible to probate it as a muniment of title.
Where the question is who inherits, the guide describes a determination of heirship as a legal proceeding that settles the heirs and the share each one takes.
Which route fits depends on whether there is a will and on what the heirs agree. The estate's attorney can say which one applies before a listing agreement is signed.
If there is a will, you may be able to probate it as a "muniment of title."
Which court hears a Woodlands owner's will?
A will is probated in the county where the owner lived, which can differ from the county the house stands in.
For an owner who lived in one of the Montgomery County villages, the court is Montgomery County Probate Court No. 1 in Conroe, the county's only statutory probate court. The Montgomery County Clerk acts as its clerk.
Creekside Park is the one village in Harris County, which has five probate courts in Houston. An owner who lived in another Texas county is probated in that county, even when the house is in The Woodlands.
What is the tax basis of an inherited Woodlands house?
IRS Publication 523 sets the basis of an inherited home at its fair market value on the date the owner died. The estate's personal representative may choose a later alternate valuation date instead.
That basis is the yardstick at closing. The IRS answer on selling inherited property is direct: a sale for more than your basis produces a taxable gain.
On a Woodlands house, months can pass between the date of death and the sale. Redfin's community median for June through August 2026 was 4.0% lower than in the same months of 2025. A sale price can land on either side of the date-of-death value, and any gain turns on that gap.
If you inherited your home from a decedent who died before or after 2010, your basis is the fair market value of the property on the date of the decedent‘s death (or the later alternate valuation date chosen by the personal representative of the estate).
Why search the Township permit record before the heirs list?
Every lot in The Woodlands is bound by covenants the Township enforces. Its Residential Development Standards make the current owner answer for an existing violation, whoever made it, so an unapproved change goes to the buyer with the house.
Heirs may not know what the owner who died built or changed on the lot. Approval covers every roof replacement, every repainting, pools and spas, replacing more than eight linear feet of fence, and removing any living tree over six inches across. The tree is measured two feet above the ground.
Search the address in the Township's online permitting portal before choosing a listing date. A gap is fixed by a new application, and the Township acts on a complete one within 45 days or it is automatically disapproved.
Where several heirs must sign, agree among them whether to apply or to disclose before the price is set. Paige Martin starts a seller's file with that permit record.
How is an inherited Woodlands house priced for sale?
From recent sales of similar size and age in its own section and utility district, which share its tax rate. As of November 2026, the median Woodlands sale was $712,500, a figure that spans every village.
Redfin's village medians for June through August 2026 ran from $363,575 in College Park to $818,605 in Creekside Park, so the community figure cannot price one house.
The season moves the calendar too. Redfin's community median was 51 days on the market in the three months to February 2026 and 22 in the three months to June.
Request a home valuation with the comparables shown, so every heir who signs the listing sees the same reasoning behind the number.
Questions & answers
The Woodlands questions, answered
Will a buyer and title company accept an affidavit of heirship on an inherited Woodlands house?
Often, yes, with a caveat. The Texas State Law Library's probate guide says real estate buyers and title companies commonly accept affidavits of heirship as proof of title. The same guide says the practice involves some risks to the buyer. Ask the title company early whether an affidavit will work for this sale, before the house goes on the market.
The affidavit is one of several informal routes the guide lists, alongside muniment of title, a determination of heirship and a family settlement agreement. Because the risk the guide names falls on the buyer, a buyer's side may ask for more than an affidavit. Settle which route the heirs will use before the listing agreement is signed, and have the estate's attorney confirm it.
Can the heirs divide the sale money differently from what the will says?
They can, if every one of them agrees. The Texas State Law Library's guide says family settlement agreements are enforceable just like any other contract. They may differ from what the will states as long as all the parties agree. With several heirs, that condition carries the weight: one heir who will not sign means there is no agreement on those terms.
Put the agreement in writing before the house is listed, so the listing, the offer and the closing all run on the same terms. The guide counts this kind of agreement among the informal ways to move a home to the heirs without formal administration. Ask the estate's attorney whether it suits this estate, and whether it pairs with a muniment of title or an heirship proceeding.
Do heirs owe tax when an inherited Woodlands house passes to them?
Not on the transfer itself. IRS Publication 544 covers the transfer of a decedent's property to an executor or administrator, or to the heirs or beneficiaries. It says that transfer is not a sale or exchange or other disposition. It adds that no taxable gain or deductible loss results from the transfer. The tax question comes later, when the heirs sell.
Publication 544's rule covers the step from the person who died to the estate or the heirs. A later sale to a buyer is measured against the heirs' basis instead. Keep the two events apart in the estate's records: the date the property passed and the date it sold.
Where do heirs find what the house was worth on the date of death?
From the executor. The IRS answer on selling inherited property says to contact the executor of the decedent's estate for information on the fair market value on the date of death. IRS Publication 551 adds that basis in some assets cannot be set by cost. Property received as a gift or inheritance is among them, so the owner's purchase price is the wrong starting point.
A listing valuation and a date-of-death value answer different questions. One prices the house for buyers in the current market, and the other sets the heirs' basis for tax. Keep the executor's figure with the closing papers from the sale, so both sit in one file when the return is prepared.
Does selling an inherited house count toward whether I need to file a tax return?
Yes. The IRS answer on selling inherited property says the gross proceeds from the sale are included in gross income when considering the need to file. The filing test looks at gross proceeds, not the gain. Whether the sale also produced a taxable gain is a separate question, answered by setting the price against the inherited basis.
Ask a tax adviser how the proceeds and any gain apply to your own return. Keep the closing statement from the sale with the executor's date-of-death figure, since the IRS measures any gain between the two.
If the estate filed a federal estate tax return, what basis do the heirs use?
The value on that return. IRS Publication 523 says that if a federal estate tax return, Form 706, was filed or required to be filed, the value of the property listed on it is your basis. Publication 551 points to section 1014(f), which requires that basis of certain property acquired from a decedent be consistent with the value finally determined for estate tax purposes.
The rule reaches a return that was required to be filed, as well as one that was filed. Ask the executor whether a Form 706 was filed or required, and for the value it lists for the house. Where the rule applies, that figure is the one the heirs set the sale price against.
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