I inherited a property with my brother & bought him out based on fair market value at the time. I sold the home 2 yrs later. Is the buyout amt included in my cost basis?

[pk · Accepted solution]

short answer -- yes.

I am assuming here that the property inherited was 50% yours and 50% your brother's. Therefore your basis in the property at the time ( and now if you have not made any improvements) is the full FMV at the time of death of the decedent ( or your original FMV basis  plus whatever you paid for the other 50% ).   Your gain is obviously sales proceeds ( sales price less sales expenses )  LESS your adjusted basis ( acquisition basis  less any allowable depreciation if you were renting out the home for the last two years).  Does this answer your question?

[cmiller1207]

Thank you!