taxes on property sold?

Question

my husbands family is selling their parents property 54000.00.
split 7 ways 13500, 13500,13500,1000,3500,9000. check will be put in one persons name and he will have to give the money to the others. anyway how does taxes work

his parents died over 10 years ago
children and grandchildren are getting money
we are getting more than market value 1.5 acre of land

there is no will and the property was in his mothers sisters name when she died due to them loaning money years ago anyway everyone signed a quit deed and one son will sell the property thats why only one check. this is what the lawyer told them to do. there was nothing shady involved the children have been paying taxes on the property for years now developers want it so they are selling.

Answer 1

You signed over the property to one person and he is selling it and giving you your share of the proceeds. You may have some capital gains to pay, depending on the value of the property at the time you inherited it.

You will report the sale of the property on Schedule D. Put "inherit" in the field for the date of acquisition. Put your share of the FMV of the property at the time you inherited it as the sales price, and your share of the sales price as the sale price.

You are not receiving more than FMV at the time of the sale. The IRS will treat the sales price as the FMV at the time of the sale.

Your capital gains tax if any will be 15% of the gain of your share of the property.

Answer 2

This is a little odd. Ten years is usually the statute of limitations for inheritance tax claims by the state. If the sale was deliberately deferred to avoid the taxes, you could all find yourselves liable for the unpaid inheritance tax.

If there was no will, each of the heirs alive at the time, or their children, would have inherited a share or interest in the real estate. That means they would all have to sign any deed and why not have separate checks for the proceeds? Capital gains taxes might be due, depending on the state and the value of the property, based on the value at the time the interest was acquired by the death of the last surviving parent.

Some people of a certain age give their homes to their children to avoid having the home subject to medicaid claims if they go into a nursing home. In that case, the "basis" is the original price the parents paid and taxes are due on the sale price less the basis and the costs of sale.

If the will put the property in trust for 10 years, it gets more complicated.

Answer 3

You leave unanswered questions?

Is there profit in the sale? If this is from an decedent's estate, profit is based on a sale price above what the property was worth when the owner died? After sales costs, you may have a long term capital loss to distribute.

How did the people who are getting a share of the proceeds acquire their interest? If they are heirs, they share prorated in the profit or loss.

Answer 4

You have a complex mess on your hands. And my gut tells me that the lawywer that told you to put the property into one person's name was clueless on taxes. Get professional guidance on the tax consequences BEFORE you go any further! You need the services of a tax attorney or CPA who specializes in probate and inheritances before you make another move!

Answer 5

in the experience that your brothers sources includes over £275k which includes money and sources. you would be taxed 40% of something over. they'll deliver you a invoice. in case you are able to no longer advance this money between you then you definately will would desire to sell between the properties.

Answer 6

The person who's name on the check need to have record of issuing the money out to others, (copy of a check, cashier check copy or reciept..etc..) and all have to claim the money as income at the end of the year (tax time).