Yes, the sales proceeds would be the amount that you received. The other person would report their share of the proceeds on their return.
The basis for inherited property is the value on the date of death. You may be able to use the tax assessor's office or know some local real estate agents that can provide a better basis. Included in the basis will also be your share of the selling expenses.
Other expenses like improvements and charges listed on the settlement statement are added to the basis.
Home improvements may come into play when you sell your home because they're included in your home's adjusted cost basis. The bigger your basis, the smaller your capital gain, and that means less tax.
To qualify as an increase in the adjusted basis when you sell, the home improvement must:
- Add materially to the value of your home; or
- Prolong your home's useful life significantly; or
- Adapt your home to new uses
Here are some examples of improvements:
- Remodels and room additions (including decks and porches)
- New or upgraded landscaping, irrigation, sprinkler system
- Hardscape such as pavement, block or retaining wall, patio
- Fencing
- Storm windows, doors
- New roof
- Upgraded wiring, plumbing, ductwork
- Central heating, AC, humidifier
- New furnace, water heater
- Filtration, soft-water, or septic system
- Built-in appliances
- New flooring or wall-to-wall carpeting
- Upgraded insulation
And some expenses that are listed on the settlement statement can be added to the basis. These include:
- Title fees
- real estate commissions
- documentary stamps
- credit report costs
- costs of an abstract
- transfer taxes
- home inspection
- flood certificate
- attorney fees, etc.
@hillmah
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