My wife's father named her and her sister along with himself on the quitclaim deed as joint tenants with rights of of survivorship. When he died, the daughters sold the property. Neither of the sister have lived in the home.
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You will average the cost basis for when they daughters went on as co-owners and when they took full ownership. You will deduct the cost basis from the proceeds.
For example:
House bought in 1970 for $100,000
Daughters join as owners in 1990, FMV is $150,000; each owner has basis of $50,000
Father dies in 2017, FMV is $200,00; each owner has basis of $100,000
When home is sold, each of the two owners has cost basis of $75,000
Home sold for $210,000, each owner has proceeds of $30,000 ($105,000-$75,000) subject to long term capital gains.
You will average the cost basis for when they daughters went on as co-owners and when they took full ownership. You will deduct the cost basis from the proceeds.
For example:
House bought in 1970 for $100,000
Daughters join as owners in 1990, FMV is $150,000; each owner has basis of $50,000
Father dies in 2017, FMV is $200,00; each owner has basis of $100,000
When home is sold, each of the two owners has cost basis of $75,000
Home sold for $210,000, each owner has proceeds of $30,000 ($105,000-$75,000) subject to long term capital gains.
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