Myself and brother and sister inherited our parent's home after they died, and we sold it in 2019. We owned the house approx 1 year and did not live there. Do we owe tax?

[HelenC12 · Accepted solution]

I'm so sorry for your loss.

Yes, you might owe some income taxes if the property increased in value from the date of your parent's passing to the date you sold it. 

• You would only pay income taxes on the amount of the increase. For example: If the property value was 100,000 on 1/2/18 and you sold it for $125,000 one year later, you would split the $25,000 gain between your siblings and pay taxes on 1/3 of the $25,000.
• If the property did not increase in value, you would enter the sale but your basis in the home would be equal to your sales proceeds.
• You would report the gain or loss from the sale as a capital gain or loss on Schedule D.
• Note: If the value of the property decreased in the year that you owned it, you would report the sale however you wouldn't be able to claim the loss since this is a personal loss. Personal losses are not deductible and TurboTax will give you a message that it's a personal loss and not deductible. 

To enter, see Where do I enter the sale of a second home, an inherited home, or land on my 2019 taxes?

[Opus 17]

Assuming that ownership was 1/3 to each sibling, then each sibling would enter the sale of an asset using 1/3 the cost basis or inherited value, and 1/3 the selling price.  

You can probably get an estimate of the market price of the home on the date of the previous owners death from a local real estate appraiser. They can do retroactive appraisals using historical data.