Sale of jointly owned 2nd house

[mgd33]

My father built a retirement home and when my mother passed away 6 yrs later he put all 5 of us children on the deed with him.  He passed a year and a half ago.  We had been on the deed for 5+ years when we sold the house(never rented it or lived in it).  We paid the inheritance tax on his 1/6.  We sold the house, splitting the proceeds.  He paid over $300K to build it, we sold it for $225K.   We received a 1099S. How do I report this?  Can I claim a Capital loss?  Do I have to report it as a Capital Gain?   

[ColeenD3]

Normally, I would go in depth to explain the difference between a gift (given while still alive ie. put on the deed) and an inheritance but the property was sold at a loss. You would divide the basis and the sales price between you all. You have to report it because it needs to be reported and because your got a 1099-S.

Personal use property does not qualify for a loss.

@mgd33

[Bobpad]

Three sisters, including my wife who files a joint tax return with me, sold a vacation home that was never rented. We lost about $12, 000. on it, or $3,000. each. In reading some comments it appears we would have to claim a gain, but can't claim a loss.

That doesn't seem right?

[Mike9241]

@Bobpad sorry but that's the tax law.  loss on sale personal use property such as a home is not deductible while any gain is taxable.