When figuring taxes on a house sold that was inherited by three siblings?

Question

do we each just claim 1/3 of everything? For instance Do we each take 1/3 of the cost to sell the home, and 1/3rd of the cost of improvements?

Are there any special forms we have to submit showing that we each only had 1/3rd of the home?

Answer 1

Assuming that you sold the property shortly after you inherited it there won't likely be any reportable gain. You get the stepped up basis at the time of the inheritance so you would only be taxed on the gain that accrues between the time that you inherit and the date of sale.

If the property was sold by the estate and you were simply given the proceeds, there is no taxable event and nothing that you need to report.

If you did have gain between the time you inherited and sold, you would each claim one third of the gain on Schedule D. That would be treated as long-term gain. The acquisition date would be the date that the bequestor purchased the home.

The easiest way would be to figure the basis and the net proceeds on the home and just divide those by 3 with each of you showing your 1/3 on your individual Schedules D.

Answer 2

It depends upon how it was inherited. If it was as surviving joint owners then take 1/3 of sales proceeds less 1/3 of cost basis and expenses. Cost basis is stepped up to gross sales price at death so you will each have a net loss equal to sale expenses. If inherited from a probate estate or trust you need to file a Form 1041 for it to pass the loss to each of you on a Schedule K-1.

Answer 3

If you each inherited 1/3 of the property, each of you would claim 1/3 of any gain. Improvements are added to your basis when the gain is computed. the cost of selling is subtracted from the proceeds. You initial basis is equal to the fair market value at on the date of death. If you sold soon after, your gain should be fairly small. After improvements, you may even show a loss. The link below is IRS publication 559 Survivors, Executors, and Administrators. You may want to review it.

Answer 4

if the house was inherited after death and sold its not taxable. example... mom bought the house for 20,000.. mom died and you guys get the house and sell it for 50,000. there is no 30,000 gain to claim as most peeps think. the value of the house is 50,000 so there is no profit to claim. now if one of the family members buys the house you will have to get it appraised.. if its value comes in at 60,000 and you sell it to them for 40,000 there will be 20,000 to claim taxes on

Answer 5

just go to an accountant, kid