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Level 2

Selling an inherited house to a relative.

My mom passed away in May of 2017. The house was in a trust so was passed on to my two brothers and myself. In November of 2017, we sat down with an attorney and had the deed transferred into our three names. At the same time, on the same day, one brother purchased the house from the two remaining children. According to the assessment, the value of the house at the time was 108k. The purchasing brother paid out a total of 47,500 to the two children which I assume would make the full purchase price of 71,250 if the purchasing brother included his share into the equation. Long story, but my portion was $27,500 and the other brother was $20,000. The lesser price was agreed upon as the house was in need of repair and updating. My questions are:

What would my portion of the capital gains be?

Can I deduct 1/3 of the cost of recording of the deed and taxes?

Are attorney fees also deductible?

Can any capital losses be claimed with the buyer being a relative.

1 Best answer

Accepted Solutions
Level 12

Selling an inherited house to a relative.

These answers assume the Fair Market Value at death was $108,000 and that it was sold to your brother for $71,250.


What would my portion of the capital gains be?

$0.  It was sold at a loss, not a gain.


Can I deduct 1/3 of the cost of recording of the deed and taxes?

Sort of, but not really.  See bottom question.


Are attorney fees also deductible?

Sort of, but not really.  See bottom question.


Can any capital losses be claimed with the buyer being a relative.

No.  Because a loss to a relative is non-deductible, any selling expenses are also not going to affect anything.
1 Reply
Level 12

Selling an inherited house to a relative.

These answers assume the Fair Market Value at death was $108,000 and that it was sold to your brother for $71,250.


What would my portion of the capital gains be?

$0.  It was sold at a loss, not a gain.


Can I deduct 1/3 of the cost of recording of the deed and taxes?

Sort of, but not really.  See bottom question.


Are attorney fees also deductible?

Sort of, but not really.  See bottom question.


Can any capital losses be claimed with the buyer being a relative.

No.  Because a loss to a relative is non-deductible, any selling expenses are also not going to affect anything.