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Level 1

Question

Sold a home from a Quit Deed

Forum|Forum|3 years ago
December 2, 2022
2 replies
29 views

My father gave( QUIT DEED) me and 3 others his house in February just before he passed. It was sold in September for 700,000 from which I got a 1099-S for 176,000.

1> Can I include as a cost basis 25% of the original purchase price from 1992 (200,000) that my dad paid?

2> Can I cost basis home improvements done by my dad on the property before he transferred it?

3> Do I need to prepay some federal taxes since it's such a big 1099? If so, how much?

TurboTax Premier Online

Level 15

you may want to confer with a real estate attorney where the property is located. That Quit Claim probably transferred the title to the 4 of you which means there is no step-up in basis to the date of death value. in that case your basis is 1/4 of his basis whatever that was (or your % interest if it wasn't split pro-rata)

Mike9241

Level 15

yes, the cost basis from the 1992 purchase is the $50,000 ($200,000 *.25)

yes, 25% of the improvements can be added to the cost basis

25% of the selling expenses can be subtracted from the sales price ($176,000 - your share)

the net is taxed at a capital gains rate.

hard to say how much to pre-pay, but 15% of the result of above would be reasonable (don't forget to consider state taxes)

unlikely this qualifies for a step-up as it was QCD prior to your parent's passing. It would be worth discussing with a local lawyer.