@debruss127 wrote:
I am still slightly confused; as I am hearing, gifting more than 16,000 is taxed. Am I understanding that correctly?
Gifting more than $16,000 (in 2022) requires filing a gift tax return. No tax will have to be paid unless lifetime gifts exceed $12 million, but the return has to be filed. A gift tax return is completely separate from your income tax return. Gift tax, and the gift tax return are the responsibility of the person who gives the gift, not the person who receives it.
@debruss127 wrote:
The home was my brother's primary residence for more than 5 years, as well.
If the home was your brother's primary residence for at least 2 years within the 5 years prior to selling it, he should qualify to exclude up to $250,000 of the gain (profit) from being taxed. His gain is the amount he sold it for, minus the amount your parents paid for it. From what you've said, the exclusion might completely eliminate any tax on the sale. The details of the exclusion are in IRS Publication 523, Selling Your Home. (The 2022 edition is not available yet, but there are no changes from 2021.)
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