Key Takeaways
- No Tennessee inheritance tax: Tennessee eliminated its inheritance tax in 2016
- Knox County probate: Typically 6-12 months; you can sell during probate with court approval
- Stepped-up basis: You only pay capital gains on appreciation after inheritance
- Sell as-is: Cash buyers purchase inherited Knoxville properties in any condition
Inheriting a house in Knoxville often comes during an already difficult time. Now you're dealing with grief, family coordination, and suddenly becoming responsible for a property in Knox County that may be across town—or across the country.
The good news: Tennessee is one of the more favorable states for inheriting property. No state inheritance tax, no state capital gains tax, and the stepped-up basis rule can significantly reduce your tax burden. This guide walks you through the Knox County probate process and your options for selling.
Knox County Probate Process
Probate in Knox County is handled by the Knox County Chancery Court located at 400 Main Street in downtown Knoxville. Here's what to expect:
When Probate Is Required
Probate is typically required when:
- The deceased owned property solely in their name
- There's a will naming beneficiaries
- The deceased died intestate (without a will) and owned real estate
When You Can Skip Probate
You may avoid probate if:
- Living trust: Property held in trust passes directly to beneficiaries
- Joint ownership with survivorship: Property passes automatically
- Transfer-on-death deed: Tennessee allows TOD deeds
- Small estates: Under $50,000 with no real property
Knox County Probate Steps
- File the will with Knox County Chancery Court
- Petition for executor appointment (Letters Testamentary)
- Notify creditors through publication in the Knoxville News Sentinel
- Inventory assets within 60 days of appointment
- Pay valid creditor claims (4-month creditor period)
- Distribute assets to heirs
- Close the estate
Probate Timeline in Knox County
Expect 6-12 months for a straightforward Knox County probate:
| Phase | Timeline |
|---|---|
| File will and petition | Week 1-2 |
| Executor appointment | 2-4 weeks |
| Asset inventory | 60 days |
| Creditor claims period | 4 months minimum |
| Resolve claims, distribute | 1-3 months |
Selling During Probate
You don't have to wait for probate to close. With court approval, you can sell during probate when:
- Holding costs are draining the estate
- The property needs repairs the estate can't afford
- Cash is needed to pay estate debts
- Property is vacant and deteriorating
The executor petitions the court, gets an appraisal, notifies heirs, and obtains approval. This adds 30-60 days but can save months of carrying costs.
While waiting through probate, someone must pay property taxes, insurance, utilities, and maintenance. On a typical Knoxville home, expect $600-$1,200+ per month in carrying costs. A $250,000 home sitting 8 months costs $4,800-$9,600 in holding costs alone.
Tennessee Tax Implications
No Tennessee Inheritance Tax
Tennessee eliminated its inheritance tax in 2016. You won't owe any state tax simply for inheriting property, regardless of value or relationship to the deceased.
No Tennessee Estate Tax
Tennessee also has no state estate tax. The only estate tax that may apply is federal, which only affects estates exceeding $15 million (2026 threshold).
No Tennessee Capital Gains Tax
Tennessee has no state income tax, so there's no state capital gains tax. Any capital gains tax you owe will be federal only.
Federal Capital Gains and Stepped-Up Basis
Here's where Tennessee's tax-free status really helps. When you inherit property, your "basis" is stepped up to fair market value at date of death:
Example:
- Parent bought Knoxville home in 1985 for $45,000
- Parent passed away in 2025; home worth $325,000
- Your stepped-up basis: $325,000
- You sell for $325,000: Capital gain = $0
- You sell for $340,000: Capital gain = $15,000
Without stepped-up basis, you'd owe capital gains on $280,000. This rule is one of the most valuable tax benefits for inherited property.
Your Options for Selling an Inherited Knoxville House
Option 1: Traditional Sale with Agent
Best for: Move-in ready properties, heirs with time to wait
Knoxville timeline: 74+ days average (up from 49 in 2024)
Costs: 5-6% commission + 2-3% closing costs + repairs
Net: 88-92% of sale price after costs
Option 2: Single Cash Buyer
Best for: Speed, but risk of lowball offers
Typical offer: 50-70% of market value
Timeline: 7-14 days
Risk: No competition means no leverage
Option 3: Cash Offer Marketplace (Recommended)
Best for: Speed + fair price through competition
Typical offer: 70-85% of market value
Timeline: 7-14 days
Advantage: Multiple competing offers drive up price
Competition among 500+ investors drives up offers while still closing in days.
Get Competing Cash OffersWhen Multiple Heirs Inherit
When siblings or other family members inherit together, each receives an undivided interest. Key considerations:
All Heirs Must Agree to Sell
Under Tennessee law, all co-owners must consent to sell the entire property.
Options When Heirs Disagree
- Buyout: One heir purchases the others' shares
- Mediation: Neutral third party helps reach agreement
- Partition action: Court forces sale with proceeds divided
Why Cash Offers Help Multi-Heir Situations
- Objective numbers remove emotion from decisions
- All heirs see the same offers—transparent pricing
- No arguments about repairs or staging
- Fast closing means quick proceeds distribution
- Out-of-state heirs don't need to travel
Documents You'll Need
- Death certificate: Certified copy (get multiple)
- Letters testamentary: From Knox County Chancery Court
- The will: If one exists
- Property deed: From Knox County Register of Deeds
- Property tax records: Knox County Trustee
- Mortgage statements: If applicable
- Tennessee Property Disclosure: Required with some exemptions
Frequently Asked Questions
How long does probate take in Knox County?
Typically 6-12 months for straightforward estates. Creditors have 4 months from Notice to Creditors publication to file claims.
Can I sell an inherited house in Knoxville without probate?
Usually no, unless the property was held in trust, jointly owned with survivorship, or covered by a transfer-on-death deed.
Do I have to pay taxes on an inherited house in Knoxville?
Tennessee has no inheritance, estate, or capital gains tax. Federal capital gains may apply if the property appreciates after inheritance.
Can I sell if the inherited house needs major repairs?
Yes. Cash investors buy Knoxville homes in any condition—foundation issues, old roofs, outdated systems, even hoarding situations.
What if I live out of state and inherited a Knoxville house?
Cash sales are ideal for out-of-state heirs. No need for repairs, staging, or multiple trips. Handle everything remotely.
Ready to See What Your Inherited Property Is Worth?
- Multiple offers in 24 hours — not one lowball
- Sell as-is — no repairs or cleanout
- Works during probate — we've done it before
- Zero cost, zero obligation
Disclaimer: This article is for informational purposes only. Consult with a Tennessee probate attorney and tax professional for advice specific to your situation.