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Ed Johnson
Ed Johnson, Tax Preparer
Category: Tax
Satisfied Customers: 10760
Experience:  GPHR Cert; U.S. Treasury Tax Advocacy Panel appointee
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my father deeded his fairfax, va home to me and my two sisters

Customer Question

my father deeded his fairfax, va home to me and my two sisters in 2000 as a gift. he passed away in 2008 and we are selling it now (or hope to). what are the tax implications? And if one is going thru a divorce is her spouse entitled to part? She lives in Alexandria, VA (Fairfax County).
Submitted: 8 years ago.
Category: Tax
Expert:  Ed Johnson replied 8 years ago.

Dear light,


Thank you for your question.


When you sell it you will be exposed to capital gains tax.


Since it was gifted to you, then the cost basis is the adjusted cost basis of your father at time of the gift.


Capital gains tax is 15%.


If one of you is divorcing, your spouse may be entilted to half of the proceeds of the sale of the property. It depends on the court.


Normally a gift is considered seperate property, but circumstances of your marriage and hanlding of the property or other matters related to the divorce settlement may make one persons share of this property divisable.


For example: any increase in value of the property during a marriage would be considered marital assets, but the base not.

Ed Johnson and 2 other Tax Specialists are ready to help you
Customer: replied 8 years ago.
Relist: I still need help.
This is an add on to my earlier question. Are we subject to capitol gains if it is sold for $258,000.
Expert:  Ed Johnson replied 8 years ago.

Quite possibly you are.


The capital gains formula is:


Capital gains (gift) = 258,000 - (Adjusted cost basis at time of gift, + improvements, + major repairs) - cost of selling.


Where Major repairs are those that you make that are intended to last one year or more such as carpets, flooring, roofs, etc.