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Megan C
Megan C, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 16547
Experience:  Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level
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3 siblings were left our parents home in a divorce settlement.

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3 siblings were left our parent's home in a divorce settlement. Our mother has lived there until she passed away. We are selling the home now and wonder if we will have to pay taxes on the proceeds. There are not debts on the home but we have spent money over 30 years maintaining it. Our other sibling was married at the time of the divorce but we would like to equally share the proceeds with her. (Do we need to do a quick claim deed for this?) We figure each siblings share to be about 25,000.00. Thanks for your help.

MyVirtualCPA :

Hello! I am a CPA here to assist you with your tax questions. My goal is to provide you with excellent service today.

MyVirtualCPA :

How are you today?

MyVirtualCPA :

I'm sorry to hear about your loss.

MyVirtualCPA :

Your basis in the home is the same as your parents basis at the time of transfer.

MyVirtualCPA :

You will pay tax on the proceeds to the extent that they exceed the basis

MyVirtualCPA :

So, if you sell the house for $100,000 and the basis is $80,000 then you will each share tax on $20,000

MyVirtualCPA :

To share with the other sibling you could either put them on the deed, or you could simply gift them the funds once you sell the house.

MyVirtualCPA :

To put them on the deed you would simply do a quitclaim deed

MyVirtualCPA :

Your basis in the house is increased by any capital improvements you make. So, if you remodeled or added a roof or had expenses like that, that will increase your initial basis. Your initial basis is what your parents paid for the house.

MyVirtualCPA :

Regular maintenance does not add to the basis

Customer:

Would property taxes and utility bills add into the expense?

MyVirtualCPA :

No those do not add to the basis

Customer:

Thank you for your help!

MyVirtualCPA :

You're welcome

MyVirtualCPA :

If you would, please rate my response as "excellent" so that I may receive credit for assisting you today

Megan C and 3 other Tax Specialists are ready to help you
Thanks Kathy for your positive rating. Please come back and visit MyVirtualCPA for any of your tax, finance, or social security needs. It was a pleasure working with you today.

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