Deductions & credits

If your parents added you to the title of the house as a joint tenant with right of survivorship, you may have to pay tax on the capital gain when the house was sold. However, it is important to consult with a legal professional to understand the specific implications and tax consequences in your situation. 

 

 

worst case scenario your basis in 1/2 of the house is 1/4 of your parents' basis in the house when they gifted it to you in 1996 (put you on the title with Right of Survivorship). When the first parent died you inherited 1/3 of their ownership with a basis 1/3 of the fair market value on the date of their death. When the second parent died you inherited 1/2 their ownership with a basis of 1/2 of the fair market value on the date of their death.

 

your brother would have the same basis 

 

to further complicate things any improvements done could also affect your basis depending on when they were done. since this was never your primary residence you are not entitled to any home sale exclusion