Hi,
Sister and I were gifted a property 10 years ago. We rented it continuously during that time and I paid all taxes/expenses and claimed all depreciation and income from the property since she did not wish to be involved. We are now selling the property and would like to know how we can divide the proceeds to minimize capital gains.
I will have real estate recapture tax to pay on top of the portion of the proceeds. Say we split the proceeds 50/50 from the sale. Assuming this is possible, would we each claim 50% of the basis we inherited for capital gains purposes? In other words, if my sister claims 50% of the income from the proceeds, would I proceed as usual as well, claiming 50% of basis (despite having claimed 100% of the depreciation, income, property tax deductions, etc) over the years. Apologies if this question is more confusing that it needs to be.
