Husband and his late brother inherited the family house and land from their father in 2011. Probate figured the house and land value at about $345,000. The brother died in 2017. Both we and the widow had separate appraisals done on the house and land. We eventually bought her half out for $245,000 + $30,000 for 1/2 value of the contents.
As for major expenses on this 14-room 1842 farmhouse, we then paid for new roof, gutters, exterior, paint, driveway, landscaping, and a completely rebuilt wraparound porch, totaling something like $150,000.
In 2024 the house and land sold for $788,000.
No one lived there out of the previous five years. The questions are: how are these transactions addressed by the IRS?
Can we count the $245,000 buy out the widow as a major expense? We've got the loan to prove that selling this house wasn't a $$ windfall. for us. Assume we can't count the $30,000 paid the widow for half the contents.
And how about the $30,000 legal fees for the lawsuit that forced a settlement with the widow?
And how about the taxes, utilities, insurance, property maintenance, etc. that we were forced to pay to maintain the value of the asset from the brother's death in 2017 to when it was sold in 2024 b/c the widow refused to settle the estate but also refused to contribute a penny but then eventually profited from our financial outlay and efforts?
