Question

My mother gifted real estate to 4 siblings.1 is buying other 3 out. How must sale be reported for 2021 taxes?

Forum|Forum|5 years ago
January 7, 2021
1 reply
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Mother is now deceased for over 4 years.

Gifted or inherited? Makes a big difference. If inherited as the basis use the FMV as of the date of death for everyone who gets bought out.......1/4 share for each sibling. The total sales price is split 3 ways and the basis is subtracted from the sales price for any gain or loss......loss will not be deductible if held for personal use.

Hal_Al

Employee

As others have said, more info is needed. Was this really a gift or an inheritance?

If a was a gift, given prior to her death, was the property her home, and did she retain the right to still live there ("life estate")?

Either way, the 3 "sellers" must report the long term capital gain on their tax return. The issue is what was their cost basis for calculating the gain.