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galli21137
New Member

A brother & sister own a house 50/50 in Joint Tenancy that they inherited from their mother 17 years ago? When one of them dies what are the tax consequences?

 
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AmyC
Employee Tax Expert

A brother & sister own a house 50/50 in Joint Tenancy that they inherited from their mother 17 years ago? When one of them dies what are the tax consequences?

There is no tax consequence until the house is sold. If the house is sold when one sibling dies, here is the breakdown.

 

Example: Mother passed and house inherited for full value at passing.  Say $100,000.

Time goes by with owners A and B. Each have a basis of $50,000.

Owner A dies and Child inherits half the house. The basis for child is half the value of the house at passing. Say house is worth $150,000 when Owner A dies. Child basis is $75,000.

 

Owner B and Child decide to sell the house 5 years later for $200,000.

 

Owner A pays tax on their 50% which would be $100,000 sales price - $50,000 basis- tax on $50,000

Child pays tax on 50% which would be $100,000 sales price - $75,000 basis = tax on $25,000

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AmyC
Employee Tax Expert

A brother & sister own a house 50/50 in Joint Tenancy that they inherited from their mother 17 years ago? When one of them dies what are the tax consequences?

There is no tax consequence until the house is sold. If the house is sold when one sibling dies, here is the breakdown.

 

Example: Mother passed and house inherited for full value at passing.  Say $100,000.

Time goes by with owners A and B. Each have a basis of $50,000.

Owner A dies and Child inherits half the house. The basis for child is half the value of the house at passing. Say house is worth $150,000 when Owner A dies. Child basis is $75,000.

 

Owner B and Child decide to sell the house 5 years later for $200,000.

 

Owner A pays tax on their 50% which would be $100,000 sales price - $50,000 basis- tax on $50,000

Child pays tax on 50% which would be $100,000 sales price - $75,000 basis = tax on $25,000

**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"

View solution in original post

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