Sticky
New Member

Inheritance or gift?

Before my father passed away he made sure my brother, sister and I knew the house was to be split between the three of us evenly. He wanted to avoid us having to go through the process of creating an estate and signed the deed over to me ( as I was local and would be best suited to deal with taxes and other tasks). Now once the house is sold and I give my brother and sister their share of the money, will it have to be claimed as a gift and subject to gift tax? Or will it be an inheritance? My brother's concern is that if he gets audited and has no proof that it was an inheritance he (or I) will face penalties.