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rhondaleah1963
New Member

I own 1/2 interest in my parents property. If my brother pays me $11,500 for his part in the property and I deed my part to him, is that taxable?

When your parents quitclaim property to you and you sell your interest to your sibling, is that taxable?

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Accepted Solutions
Hal_Al
Level 15

I own 1/2 interest in my parents property. If my brother pays me $11,500 for his part in the property and I deed my part to him, is that taxable?

 Yes, probably. But it depends on the details.

The general rule is that you have a taxable capital gain if the $11,500 you received was more than your  parent’s cost basis in the property. The cost basis in a gift is the giver’s cost basis. That is, your cost basis is what your parents paid for it, plus any adjustments.

Here's an example: your parents paid $20,000 for the property many years ago.  Now they jointly deed it to you and your sibling. You each have a $10,000 cost basis in your half. If you sell your half to your brother for $11,500; you have a $1,500 capital gain to report on your tax return. 

If you sell to your brother, at a loss, you may not deduct the loss. Also, note that it does not matter, for income tax purpose, what the property is currently worth

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1 Reply
Hal_Al
Level 15

I own 1/2 interest in my parents property. If my brother pays me $11,500 for his part in the property and I deed my part to him, is that taxable?

 Yes, probably. But it depends on the details.

The general rule is that you have a taxable capital gain if the $11,500 you received was more than your  parent’s cost basis in the property. The cost basis in a gift is the giver’s cost basis. That is, your cost basis is what your parents paid for it, plus any adjustments.

Here's an example: your parents paid $20,000 for the property many years ago.  Now they jointly deed it to you and your sibling. You each have a $10,000 cost basis in your half. If you sell your half to your brother for $11,500; you have a $1,500 capital gain to report on your tax return. 

If you sell to your brother, at a loss, you may not deduct the loss. Also, note that it does not matter, for income tax purpose, what the property is currently worth

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