My brother & I inherted a summer cottage from our parents (shack, no heat or water, access by boat only) about 10-years ago, the appraised value back then was $130k. This year in August, I negotiated & sold my 50% share to my brother for $125k. I have invested about $50k in improvements, along with recently purchasing a boat ($35k) to access the cottage since its located on its own island & only accessable by water.
I went through a title company in the sale, instead of a quick claim deed, to ensure payment, title/tax transfer, & the title was "clean". I am guessing I will receive a 1099-S for the gross proceeds.
Since this cottage was "in our family", are there any favorable tax laws in regards to the capital gains? How do I write-off the improvements & boat to access the cottage if I have to pay capital gains? My AGI in 2021 is under $100k.
