KrisD15
Expert Alumni

Get your taxes done using TurboTax

Real estate laws are governed by the state, but the first issue would be "HOW were you added to the deed?".

 

If it was done as a "Life Estate" this usually means the property by-passes probate court and goes directly to the "remainderman".

In this case, the basis is determined on the Fair Market Value on the date of death for the "life tenant" (your mother).  That is what is referred to as a "Stepped-up" basis, you get to "step-up" the value to reflect the value on the date you inherited the home. 

 

If, on the other hand, you were added as owners in 2008, your basis would be determined on the Fair Market Value on the date you were added onto the deed. Since real estate usually appreciates, you most likely would have more of a gain in this scenario. 

 

Title should have issued Form 1099-S. It is not always done.

 

Any reasonable method to get the basis would be acceptable. Whether that will need to be for 2008 or 2022 depends on how you were added to the deed and if added as owners, what percentage of ownership. Did you each own 1/6th and your mother inherited your father's share? If so, she would get a stepped-up basis when your father died. 

So, yes it could become complicated unless it was done as a Life Estate in which case the only basis you need is the value on the date of your mother's passing. If you used a real estate agent to sell the house, ask them to do a Fair Market Analysis for the date you need. 

 

The information about your sister living in the home would not affect you, but if there is Capital Gain on the sale, she might be able to use the exclusion if she owned and lived in the home two of the five years prior to the sale. 

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