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January 17, 2024
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My husband inherited 1/3 of his father's share of a family cottage. Now him and his sister own 50/50. How do we report the inheritance when filing taxes?

  • January 17, 2024
  • 3 replies
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Best answer by DoninGA

If the property has not been sold there is nothing to enter on the tax return.  Inheritances received are not reported on a federal tax return.

3 replies

DoninGA
DoninGAAnswer
Employee
January 17, 2024

If the property has not been sold there is nothing to enter on the tax return.  Inheritances received are not reported on a federal tax return.

Hal_Al
Employee
January 17, 2024

As @DoninGA said, you have nothing to report on your current year tax return.  Inheritances are not reportable. But, you may need to adjust your cost basis for when the property is sold in the future. 

 

January 17, 2024

The property was in his father’s, his sisters and his name- title transferred before his passing. 
a lawyer said we would need to pay tax on the third of the property- the inherited portion from his dad. 
at this point in time him and his sister own the property together that’s why I commented 50/50

January 17, 2024

He needs to keep track of his tax basis in the property. The original 1/3 would probably be 1/3 of the FMV at the cottage on the date of death of his Father, assuming his father owned it 100%.  

Then depending on how he went from 1/3 ownership to 50/50 ownership, that too would be added to his tax basis.