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We lived in a mother / daughter house with my father. I have

We lived in a mother...
We lived in a mother / daughter house with my father. I have lived in the house all my life. I spent the last 15 years as his care taker. In March he passed away and my 3 siblings and I got the house. (no will) and they signed over their shares to my wife and I. The house was in total disrepair. Dad would never allow us to fix anything. So we sold the house as it was to a builder for 200,000. We purchased a condo for 60,000. Therefore we did walk away with about 140K. What type of taxes are we looking at. This is the first home purchase for both my wife and I.
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Answered in 1 minute by:
11/4/2013
Robin D.
Robin D., Senior Tax Advisor 4
Category: Tax
Satisfied Customers: 16,236
Experience: 15years with H & R Block. Divisional leader, Instructor
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Robin D. :

Hello and thanks for trusting me to help you today. I am a tax adviser with over 15 years of experience.
Your wife inherited the property (her share) at fairmarket value on the date of death of her father, so did the sibs.
When they gave her their portion she retained their value.
This means that the fair market value of the house is her cost. She would only pay tax on the difference in cost and sale price.

Robin D. :

Any improvements made before sale would have increased her cost. The fact that you purchased a condo with proceeds does not factor into any portion.

Robin D. :

It is likely that she may see a small loss on the sale.

Robin D. :

My goal is to give you excellent service. If you are satisfied, please rate me. If you have follow-up questions on this same topic, use the reply box below. To start a new conversation with me on a new topic request me again.

Robin D.
Robin D., Senior Tax Advisor 4
Category: Tax
Satisfied Customers: 16,236
Experience: 15years with H & R Block. Divisional leader, Instructor
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