Inherited Different Percentages of Property at Different Times

[Kimsfltaxes]

I inherited 33% of my grandmother's home in 2012 when my father passed away. When my grandmother passed away in 2017, I inherited half of her third, giving me 50% of the property. I sold the 50% to my uncle in 2022. How do I figure the stepped-up basis and the capital gains?

[Kimsfltaxes]

I believe the property was worth:

$150,000 in 2012

$250,000 in 2017

$315,000 in 2022

Sold to uncle for $150,000

[Mike9241]

$150,000 in 2012 1/3 of this is your inherited tax basis  for this portion is $50K

$250,000 in 2017 if there were 3 owners - you, grandma, and a 3rd party and grandma left her 1/3 in equal portions to 6 people including you your inherited tax basis in her portion would be 1/6 of 1/3 or about $13,889

*you would not own 50%

* with 3 equal owners in 2017 including you each owns 1/3 so that means before we figure the allocation of grandma's share 2/3  (grandma 1/3 others 1/3) would not be owned by you.

1/6 of 1/3 of grandma's share that you inherited would be 5.56% so you would own 38.89%

*others own 27.78% of grandma's share  (5/6 of 1/3) and 33.33% directly from when  your father passed or 61.11%

I went through the math just to make sure I understood the ownership %'s correctly. 

[Kimsfltaxes]

Hi Mike,

Thank you for your reply. I made a mistake in my post: in 2017 I inherited half of my grandma's 1/3, uncle inherited the other half (so we each inherited 1/6th of the property, plus the 1/3 we each already owned, giving us each 50%). I've edited the original question to show the correct percentage...I'm so sorry!

[Mike9241]

nothing to be sorry about. mistakes are made.   your numbers didn't jive that's why i posted the way i did. 

so your basis is the $50K + 1/2 if the $250K.  

when you do the reporting for the date of acquisition either select inherited or type the word in. 

[Kimsfltaxes]

Thank you for being understanding and looking at the scenario again.

So $50K + $125K = $175K 

$175K basis, sold for $150K, so a loss of $25K

No capital gains? 

If that is true, can you show a loss?

Thanks again!!

[Mike9241]

now it's my math that was wrong 

$250,000 owned in thirds 

you already owned 1/3 so there is no further step-up in your tax basis in this portion 

as did your uncle and grandma so each of you had $50,000 in tax basis from the 2012 inheritance

but since you and your uncle inherited your grandma's 1/3 the 2012 value doesn't apply to this portion. it's

is 1/3 of the $250,000 split 50/50 or $41,667

[Kimsfltaxes]

So would the basis be:

$50,000 + $41,667 = $91,667?