Back in 2013, my parents bought a house in California as a primary residence. In 2020, my mother passed away and my mother's 50% ownership automatically went to my father. However, my sister and I demanded mother's ownership as inheritance. So, this year, my father transferred 50% ownership to my sister and I, so now we both owning 25% each.
My family decided to sell the house but worried about high tax on capital gain. My sister and I just received ownership this year so we do not quality for $250K Home Sale Tax exclusion.
My question is can our ownership qualify as inheritance or is it gift? If gift, is there any way to reduce tax on capital gain?
Thank you very much!
