@heather-marco here is how it works.
- the Cost Basis is $155,000 + $15,700 or $170,700. And each of you share 1/3 of that or $56,900.
- The appraised value of the property on the date of death was $232,000 and 1/3 of that is $77,300, representing the estate's share. Half goes to you and half goes to your sister.
- So your new cost basis is $56,900 plus $77,300 /2 or $95,500.
- The net selling price of the home was $208,950 (sales price less the sales expenses). Half of that is your responsibity or $104,500.
- That means your profit is $104,500 less the cost basis of $95,500 or a profit of $9,000.
- Depending on your income that will be taxed at either 0%, 15% or 20%. the appropriate bracket is reflected in this article. Be sure to pick the right row with your filing status and the chart with this title:
2022 Long-Term Capital Gains Tax Rates
https://www.forbes.com/advisor/taxes/capital-gains-tax/
this is a "long term" gain as you owned the property for more than 1 year and your mother's share that you inherited is always considered "long term", even if you owned that share for less than a year.
If you fall into the 15% tax bracket, it's $1,350 in federal tax. You'll then have to decide if it is worth paying a lawyer or just paying the $1,350.
ps. I would request an appraisal to determine the value of the property as of the date of death. It is important documentation to have.
