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Capital gain tax when selling a house with ownership 50/50 with my brother

New York, NY |

I have a house and I have lived for 3 years. The house is owned with my brother who has 50% ownership. He lives somewhere else. I paid all mortgage payments and taxes by myself. If I sell the house, does my brother need to pay tax on capital gain? The house increased its value. I know I don't have to pay tax on my capital gain since I have been living in this house as my primary house. How about my brother's capital gain tax?

Can I say to IRS that since I have been paying all mortgage payments and taxes, I should keep the capital gain and pay no tax up to $250,000 if my brother agrees with it?

Attorney Answers 2


  1. Best answer

    You and your brother will have to determine your tax basis in the property. The tax basis, selling expenses and closing costs are then deducted from the sales price to determine the taxable gain, if any. You will be able to exclude $250,000 as your primary residence and your brother will be able to exclude nothing on his portion of the gain. This can be a complex calculation and you should have a local tax attorney or CPA review the transaction and make the calculations for you.

    H. Daniel Lively, Esq., LL.M., CPA Certified Tax Specialist, CA Board of Legal Specialization dlively@livelylawgroup.com www.USTaxRescue.com 714-708-2593 Mr. Lively is a Certified Tax Specialist by the State Bar of California Board of Legal Specialization. He can be reached at 714-708-2593 or USTaxRescue.com.Any individual seeking legal advice for their own situation should retain their own legal counsel as this response provides information that is general in nature and not specific to any person's unique situation. Circular 230 Disclaimer - Advice given in this response cannot be used to eliminate penalties with the IRS or any other governmental agency.


  2. There are a few items to consider in this transaction. How and when the property was acquired by the parties? What the basis is in the property? Have there been any improvements, repairs? Who pays the other expenses? Who has been reporting the mortgage and r/e taxes on their return each year. etc.? In addition, once the property is sold the sales price will play a role. Consulting a tax lawyer before selling the house may prove to be beneficial.

    Louis T. Wierenga Assisting in mitigating your business and tax risks. www.LTWLAW.com E Ltw@LtwLaw.com Twitter @LTWLAW The information provided is for general purposes only and should not be construed to be formal legal advice nor the formation of a lawyer/client relationship.

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