Lawsuit settlement from real estate.

[alalvar27]

My parents got into a real estate deal back in the early 90's. By 2009 the property was to be paid off, and then sold for which all owners would get a piece of the profit (this is all on the contract). Well, this never happened, then my parents were getting sued to give the house back, without any payment. Long story short, my parents countered sued, won, and my parents got a piece of the proceeds. Will they need to pay taxes on this settlement?

[Mike9241]

they got part of the sales proceeds so its taxable as long-term capital gain. to offset this would be their basis in the property