Inherited/gifted home

[Lindysue]

My repost had another typo in it.  Let me see if I can summarize with the "correct" info.

• Home originally purchased in 1953 for $10,000
• I located deed from 1989 that shows a Quit Claim deed was filed to mom and my brother and myself as "joint tenants with full rights of survivorship". 
• Mom died in 2013. SEV in 2013 was $20,000 per township records
• In 2020, I signed a quit claim to transfer home exclusively to brother
• Brother quit claimed home back to myself and his ex-wife in December 2022 when he became ill. 
• He passed away in July 2023, and we sold home in October 2023 for $155,000 to be split between the 2 of us. 

I think I have the facts correctly stated this time. Sorry for the errors in the previous posts. Any help in how and where to claim this will be most appreciated! 🙂

Sorry for need to repost with corrections

[RobertB4444 · Accepted solution]

In 1989 the basis transferred to you and your mom and your brother.  Each of you had a basis of $3,333.33.

In 2013 when your mom died her third of the value stepped up to one third of the market value that year.  So her basis became $6,666.66.  That value transferred to you and your brother so each of you had a basis of $6,666.66.

In 2020 the whole basis of $13,333.33 transferred to your brother with your quitclaim.

In 2022 your brother quitclaimed it back to you and your ex-sister-in-law so the basis transferred back at $6,666.66 each.

In 2023 your brother passed but because he had quitclaimed it back to you before that his death has no effect on the basis.

In 2023 you sold the home for $155,000.  That is $77,500 apiece, minus the $6,666.66 basis for a gain of $70,834.34 each.

There were also closing costs on the sale.  As well as any money you spent fixing the place up in order to sell it.  Those costs should be divided between you and your ex-sister-in-law and deducted from the gain.

As a purchase date you can use the date in 2022 when your brother quitclaimed the house back to you.

@Lindysue 

[MRivero]

@RobertB4444   Hi.  Hoping you can assist me with this.  I inherited a house in 2022 and sold it in 2023, nine months later.  I paid property taxes on the house in 2022, and then at closing in 2023 paid prorated property taxes.   Can I deduct these payments from the capital gain on the sale of the house?  Thanks.

[PatriciaV]

Property taxes are itemized deductions reported on Schedule A, even for a "second home". These payments are not included in the sale of the property and have no effect on the capital gain/loss from the sale.

For your reference:

Sales expenses include:

• commissions
• appraisal fees
• broker's fees
• legal fees
• advertising fees
• home inspection reports
• title insurance
• transfer taxes or fees
• geological surveys
• loan charges (points) or other fees paid on the buyer's behalf

Sales expenses do not include:

• mortgage payoffs
• home equity loan payoffs
• rent-back costs
• payoff to creditors
• property taxes
• homeowner association fees

@MRivero