Long term capital gains on property inherited by three individuals

Forum|Forum|3 years ago
November 10, 2022
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My mother and her two Siblings were left a piece of property they are fixing to sell. My grandmother inherited it from her parents, she passed and left it to her kids. It is vacant land and has been over a year since she passed. It was never divided up in acreage, they are fixing to sell it. What would the taxes be on it besides long-term capital gains and how would they go on the appreciation of it since the property is so old.

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rjs

Employee

The old history of the property doesn't matter. Your mother and her siblings inherited it recently. Their basis is the fair market value on the date of your grandmother's death. Whatever happened before that doesn't matter. The best way to determine the fair market value on the date of your grandmother's death is to get a professional appraisal.

The three siblings' gain on the sale will be what they sell it for, minus their basis, which is the fair market value on the date of your grandmother's death. They will each report their share of that gain as income on their tax return. In other words, they pay tax only on the increase in value since your grandmother died. Gain on the sale of inherited property is always considered long-term, no matter how long they actually owned it.

I don't know what you mean by the taxes "besides long-term capital gains." The tax on the long-term gain is the only tax they will pay.