Hello fellow taxpayers!
Just wanted a clarification on how this should be filed or if it even needs to be filed at all.
Money received from a sibling as a buyout for inherited property that was left by a parent.
In this case the money received from the buyout was substantially less than the FMV of the property at the time the deceased passed away and even far less now. So here's the breakdown example: FMV was 400K, buyout was 150K. How should the person who received the buyout report the 150K on their taxes and does it even need to be filed? Should it be reported as a Capital Loss which in this case given the example it would be or given that it's a transfer of a property between two siblings would it be subject to the gift tax?
Also, if there is no other taxable income for that year or it falls under the federal threshold for filing, does the IRS still require a tax return to be filed just for the purposes of having this transaction on file?
Thank you for the help in advance!
