You only need to report your share of the proceed and cost basis.
Did you live in the inherited property? Was it your primary residence in the past 5 years? If yes, you may qualify for the principal residence exclusion:
- Individuals can exclude up to $250,000 of capital gains from the sale of their primary residence.
- Married couples can exclude up to $500,000.
If not, you can defer paying taxes on the sale of the inherited property by reinvesting the proceeds into another investment property by using a 1031 exchange.
Like-Kind Exchanges Under IRC Section 1031
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