@0adestate wrote:
We found a buyer for the vacant land and sold it to him for 315000, lower than the cost basis.
Are you certain of your cost basis? It is likely that your cost basis is the fair market value on the date of death of your mother if you inherited the property directly from your mother in 2019.
Of course, everyone could be "reimbursed" for property taxes paid on the land over the years, but they will not be able to deduct any of the payments (or the toral) from their income taxes since payment of those taxes was not their obligation.
The distribution of proceeds to the families would be considered to be a gift at this point since you apparently had no legal obligation to make such a distribution if you father (or mother) did not leave a will or other testamentary document directing you to do so. In fact, if more than $16,000 (in 2022) was given from one individual to another, a gift tax return is required to be filed (Form 709).
See https://www.irs.gov/instructions/i709#en_US_2022_publink16784xd0e649
Your father's intention to divide the proceeds among the seven families should have been memorialized in writing, particularly in the form of a will or trust. Otherwise, the intention is nothing more than precatory and there is no legal obligation for anyone to carry out the instructions.
You might want to consult with local legal counsel.
See https://www.avvo.com/estate-planning-lawyer.html
