Will I be taxed after selling a co-owned non-primary home?

[auntsharon1950]

My Brother and I  inherited the house after the death of our parents. The difference between what they paid for it and what we sold it for is only $20,000.

[MinhT1]

Yes. 

You will taxed for capital gain if there is a profit between the sale price and the fair market value of the home at the time of death of your parents (not what they paid for it).

There is a step-up in basis for inherited property.

[Opus 17 · Accepted solution]

Your cost basis is not what they paid, it is the fair market value on the date the previous owner died.  If you sold within a short time of their death, and the real estate market was not super crazy, it is likely that the value did not change much, so you sold the property for the fair market value.  That means you have no capital gains to tax.

If the market did move, then you will owe capital gains tax on the difference between the selling price and the air market value on the date the previous owner died.  You may need to get an appraisal to support your valuation.  (In your case, each sibling reports half the basis, half the selling price, and half the gain.)

[Hal_Al]

Considering the selling costs (real estate commission etc.), you may even show a loss.  You may not deduct a capital loss on the sale of personal use property.  You may deduct the capital loss on the sale of investment property. 

"Personal use" is determined by how you and/or your brother used the property, after inheriting it (not by how your parents previously used it).  If it sat idle, then it is classified as investment property, for income tax purposes. 

[Carl]

My Brother and I inherited the house after the death of our parents. The difference between what they paid for it and what we sold it.....

What your parent's paid for the house is irrelevant. When you inherited the property, you get a step-up in the cost basis that is the FMV of the property on the date the last parent passed. (Not the date you inherited it and titled it to your names.)