My mother in law quit claimed her home to her 5 children in 2017 then passed in 2018. The house was bought in 1960 for $60,000. It was sold to a developer in 2020 but 3 of the siblings remained living there and paying property taxes until the closing in 2023. It was valued at $750,000 on Realtor.com if purchased by a private party. Each sibling received $320,000. We put 300,000 into a cd and kept 20,000 for home improvement and medical expenses. I'm assuming the year of the closing date and money disbursement would be the same as the tax year.
1. Is this a gift and/or subject to capitol gains taxes?
2. Would it be considered and inheritance and how would taxes affect it?
3. If it was put in a CD is there still taxes due on it or would it be deferred until any port of it is taken out?
4. How would the $20,000 be affected after used on home improvements and medical expenses?
