Capital gains

[Mauishirley]

I inherited 1/3 of some property (land with a lease) from my mother in 1973. My 2 sisters inherited 1/3 each as well. In 2018 one of the sisters died, leaving her 1/3 to each remaining sister. Each sister now owns 1/2 of the property. We are selling it this year. 

How do we calculate the cost basis for the capital gains. For the purposes of this, let’s say in 1973 the land was worth 50,000, and in 2018 it is worth 500,000.

[M-MTax]

The basis of your original 1/3, that you inherited from your mother, is still 1/3 of $50,000, or $16,667.00.

You then need to add the FMV of the 1/6 you inherited from your sister in 2018, which would be $83,333.

So, your basis currently would be $100,000 (with rounding since this is an odd split percentage).

[Mauishirley]

Thank you. That was exactly what I was thinking, just wanted to be able to confirm it. I appreciate the answer.