inherited property

[irja]

We inherited property 20 years ago.  My brother has been living there (he owns half) and has improved the property.  We have decided to sell our share to him.  We based the price on what our share was worth 20 years ago when we inherited the property, although today it is worth much more.   Will we owe capital gains on this even  though no gain was made on the original FMV or would we even have a capital loss since the price is less than the current FMV?

[Anonymous_]

You should seek professional tax guidance from a local tax professional and, probably, local legal counsel for this matter.

However, you cannot recognize a capital loss on property that is held for personal use.

You also cannot recognize a capital loss on property held for investment purposes if the property is sold to a relative at less than its fair market value.

Seek assistance from a local professional.

[Critter-3]

The difference between the inherited value and the current value would be a gift of equity so a gift tax return would need to be filed as well ... seek local professional guidance for this matter. 

[irja]

Thank you!