The exclusion on reassessment applies only when property is transferred from parent to child
or from child to parent, but not when it is transferred between brothers and/or sisters. You could not legally do a sale and avoid reassessment of the property.
As far as capital gains tax for your brother, he would owe capital gains tax on the sale, assuming he has not also used that home as his primary residence. Since this home was a gift to you and your brother, then you each retain the same basis as your father's original basis. So your combined basis in the home is whatever your father originally paid for the property plus the cost of any improvements he made during the time he owned it. You would then also add to that basis the cost of any improvements that you and/or your brother made to the home. Each of you then have 50% of that amount as your basis.
When he sells his share of the home to you, his gain will be figured by taking the sale price less his share of the basis. That gain will then be subject to long term capital
gains tax, and that rate
is currently capped at 15%. He would also owe ordinary income
tax to the state
, and that tax rate
will depend on what his other overall income
is for the year, as it is his total income that determines his tax bracket.
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