Hello @bc-23 ,
I'm happy to help you with this great question!
First, let me say that I am sorry for the loss of your mother-in-law.
When selling property, only the gain on the sale is taxable.
To determine if there is a gain, you have to know your husband's basis in his portion of the home.
Based on your comments, it appears that your mother-in-law gave the home to her sons as a gift.
The following IRS article provides guidance on determining the basis in property received as a gift:
https://www.irs.gov/faqs/capital-gains-losses-and-sale-of-home/property-basis-sale-of-home-etc/prope...
A loss on the sale of personal property is not tax deductible. However, a gain on the sale is taxable.
If the property was held in his name for more than one year, more favorable long-term capital gains tax rates would apply. If it is sold in less than a year from the date it was gifted to him, ordinary income tax rates would apply to any gain on the sale.
I hope that this answers your question. Please, feel free to reach out with any follow up questions that you may have.
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