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TaxRobin
TaxRobin, Tax Preparer
Category: Capital Gains and Losses
Satisfied Customers: 13317
Experience:  15+ years in Tax preparartion as well as Instructor for tax law, theory, and application
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A brother and sister inherited a home together. The sister

Customer Question

a brother and sister inherited a home together. The sister lived in it rent free for four years. They sell the house and there is a $450,00 gain on the property, which means the sister, who is living there does not have to pay any capital gains and the brother has to pay all of the capital gains on his part. Is there any way that the sister can be made to pay some of the capital gains?
JA: I love the idea of making big money with investments, but there are so many things that could go wrong. The Accountant will be able to help you. Is there anything else important you think the Accountant should know?
Customer: I don't think so. The sister is refusing to pay any of the taxes and refused to pay any rent.
Submitted: 1 month ago.
Category: Capital Gains and Losses
Expert:  TaxRobin replied 1 month ago.

Hello, I'm Robin. Welcome to JustAnswer. I'm reviewing your question now and typing up my reply. I'll post that in just a few moments.

Expert:  TaxRobin replied 1 month ago.

The siblings are required to split the sell and each report their half on their own returns.

The cost (or basis) is the fair market value on the date the deceased passed away. If the brother's half of gain is really $450,000 then he will need to pay his own tax. A person cannot be made to take on tax that is not legally their tax to pay.

I would stress that the actual gain needs to be verified and the brother reminded that only his half is reported on his return.

Expert:  TaxRobin replied 1 month ago.

Please let me know if you need clarification (especially about the gain calculation). If you do not then a positive 5 star rating is appreciated so I get credit for the response. (look for the STARS or SMILEY FACES)

Expert:  TaxRobin replied 1 month ago.

Hello, I wanted to check back and see if you needed more help and calculating the gain for the sale.

Customer: replied 1 month ago.
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