topic inherited property in Get your taxes done using TurboTax

inherited property

irja — Sat, 30 Oct 2021 14:31:07 GMT

We inherited property 20 years ago. My brother has been living there (he owns half) and has improved the property. We have decided to sell our share to him. We based the price on what our share was worth 20 years ago when we inherited the property, although today it is worth much more. Will we owe capital gains on this even though no gain was made on the original FMV or would we even have a capital loss since the price is less than the current FMV?

Re: inherited property

Anonymous_ — Sat, 30 Oct 2021 15:17:45 GMT

You should seek professional tax guidance from a local tax professional and, probably, local legal counsel for this matter.

However, you cannot recognize a capital loss on property that is held for personal use.

You also cannot recognize a capital loss on property held for investment purposes if the property is sold to a relative at less than its fair market value.

Seek assistance from a local professional.

Re: inherited property

Critter-3 — Sat, 30 Oct 2021 15:24:30 GMT

The difference between the inherited value and the current value would be a gift of equity so a gift tax return would need to be filed as well ... seek local professional guidance for this matter.

Re: inherited property

irja — Sun, 31 Oct 2021 12:02:28 GMT

Thank you!