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Sale of what was jointly inherited property
My wife jointly inherited some real estate property valued at $100,000. We bought out her siblings share for $50,000. We rented the place out for a few years, took depreciation on the asset based on the $100,000 valuation and now have sold it for $111,450. I understand that I will have to pay taxes on the depreciated amounts. Furthermore, I have been carrying over passive losses which will offset the minimal gains. I am trying to come up with the total capital gains(loss) on the property. However, what is the cost basis for the property? If I use the original value of the property it seems I'll will be paying tax on her inheritance. And, how will our actual investment of $50,000 get accounted for?
‎April 29, 2020
12:04 PM