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Barbara
Barbara, Enrolled Agent
Category: Tax
Satisfied Customers: 3363
Experience:  18+ years of experience in tax preparation; 25+ years of experience as a real estate/corporate paralegal.
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My mother gifted her house she lived in to my brother and me

Customer Question

My mother gifted her house she lived in to my brother and me 10 years ago. After her passing this year we sold the home. will the proceeds be taxed and if so how ?
JA: The Accountant will know how to help. Please tell me more, so we can help you best.
Customer: What else will you need to know ?
JA: Is there anything else the Accountant should be aware of?
Customer: The house sold for $205,000.
Submitted: 8 months ago.
Category: Tax
Expert:  Barbara replied 8 months ago.

Welcome to Just Answer. My name is ***** ***** I will be happy to assist you.

Give me a few moments to review your question and formulate my response.

Expert:  Barbara replied 8 months ago.

You will pay capital gains tax on the difference between the basis (as adjusted) and the sales price. Because the property was gifted to you and your brother, there are different rules if you sell at a gain or a loss.

The following link provides excellent information:

http://www.360financialliteracy.org/Topics/Home-Ownership/Buying-a-Home/What-is-the-basis-of-property-received-as-a-gift

For example, if the basis was $155,000 when you received the property as a gift and you now sell for $205,000, you will pay capital gains tax on $50,000, or $25,000 each because there are two of you. You can add closing costs and real estate commissions to the basis to reduce the amount on which you pay capital gains tax.

Please let me know if I can assist you further.

Thank you and best regards,

Barb

Expert:  Barbara replied 8 months ago.

Just following up with you to see if you have any other questions. If so, please let me know so I can further assist you.

Best regards,

Barb