@Hal_Al wrote:
As others have said, professional tax help is advised. That said, here are some things to be aware of.
Q. Since we sold to a family member for less than appraisal value would that be a lost if stepped up value to 2023?
A. No. You are not allowed to deduct a loss, in that situation. In addition, the difference between the value and the sale price is a "gift of equity" and requires a gift tax return if the difference amount is more than $17,000.
This is one of the reasons I suggested (as did rjs) that @mgawro01 seek professional assistance and, most likely, local legal counsel.
We have no way to examine the deed and determine how title was held between @mgawro01's mother and father and we also have no way to examine the deed after @mgawro01's mother was removed from title.
As a result, we have no way of knowing how title was being held between @mgawro01 and @mgawro01's father. The foregoing makes a great deal of difference as does whether or not there was some sort of valid testamentary document.
Finally, and with reference to the above-quoted Q&A, @mgawro01 stated that the sale was to a nephew and that relationship is not included in the related party rules in the Tax Code (Section 267). As a result, a loss on a sale to a nephew could be recognized.
