I had inherited a property in Canada in mid 2024 (that was a principle residence from my mother before she passed away). It was 25% of the property, whereas my other siblings owning the rest of the 75%. When the estate was approved in mid 2024, I paid / purchased the other 75% from my siblings, making me the sole owner for this property now.
The property is being hold and being prep for rental in Canada. No rental income for CY2024.
Question: is there anything that I need to declare to IRS about this inherited property (25% from inheritance) for CY2024? If so, which form? Thank you.
On your 2024 income tax return, you would only need to report any income received or deductible expenses paid during the year that were attributable to the property. If the property is not being rented, then you probably have nothing to report unless you paid real estate taxes. You would need to report the sale of the property in the tax year that it is sold.
You can start reporting rental income and expenses when the property is ready and available for rent. See this TurboTax tips article for more information.
when I sold the property in future (x number of years later), is there something I need to report now, so it is clear I only inherited 25% of the property? But the remaining is what I purchased from my siblings.
so, the baseline cost is reflected correctly for this property.
You don't need to report anything about how you acquired the property for 2024. When you are ready to rent it, then you will need to calculate your basis in the property, including the portion you inherited and the portion you purchased, and the percentage of the total value attributed to land, in order to set up the depreciation schedule.
See this tax tips article for more information.
No, if you have not started renting it, you do not have to report it on your 2024 taxes. When you start renting, you will need the information of what you paid to your siblings and any improvements to the property for the depreciation.
No, you don't have to report anything now. When you sell or rent the property, you will need to use the basis of the property for depreciation. That basis will be your 25% you inherited + what you paid to the 3 siblings for their shares. See basis.