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My parents signed over there house to me and my two

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sibblings back in 1989 my...
My parents signed over there house to me and my two sibblings back in 1989 my mother passed away May 27,2015. We are in the process of selling the house. We are wanting to know if we will have to pay taxes on the proceeds of the house. The house was purchased over 40 years ago.
Submitted: 2 years ago.Category: Legal
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10/4/2015
Lawyer: Barrister, Attorney replied 2 years ago
Barrister
Barrister, Attorney
Category: Legal
Satisfied Customers: 39,588
Experience: 17 yrs practice, Civil, Criminal, Domestic, Realtor, Landlord 26 yrs
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Hello and welcome! My name is ***** ***** I will try my level best to help with your situation or get you to someone who can.

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We are wanting to know if we will have to pay taxes on the proceeds of the house.

.

Unfortunately, the answer is yes, capital gains taxes would be due on the difference between what parents paid for the house and any improvements over the years and what it is then sold for. This is because when someone gifts real estate to another person, the recipient takes the owner's "cost basis" as their own and then when they later sell it, they have to pay capital gains on it.

.

So for example, if they bought the house for $30K 40 years ago and put an addition on it later for $10K, then their basis is $40K. So if it was gifted to you and siblings, then that is your cost basis as well so if you sell it now for $100K, you would have $60K of taxable gain at long term capital gains rates that would vary based on what income bracket you are in.

.

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thanks

Barrister

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Barrister
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Barrister, Attorney
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Experience: 17 yrs practice, Civil, Criminal, Domestic, Realtor, Landlord 26 yrs

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