@Drkbest wrote:
Yes, he passed July 2023, we sold it as joint tenants.
If your father retained a life estate, meaning he had the right to live there until he died, then you received the property with a stepped up cost basis equal to the fair market value on the date he died. So you likely have little to no actual capital gain.
Even if the life estate is not written into the deed, it might be implied by the overall facts and circumstances (such as, you and your father agreed he would live there until he died and that was your intention even if it wasn't written down). However, if audited, it can sometimes be more difficult to prove an implied life estate because it wasn't written down.
You might want to take the original deed to a tax accountant or attorney for a professional opinion.
If there was no life estate at all, then your basis is 1/3 the price he originally paid in 1968 (because he gave each brother 1/3 of the house if there were three names on the new deed), plus each brother inherited 1/6 the house (half the father's remaining 1/3 share) when he passed, getting a stepped up basis on that 1/6 share.
