My parents both passed away within one month of each other. There are four siblings, we just recently sold their home and I will be the one responsible for dividing up the money between us. Do we have to claim it on our taxes as income?
Yes. You will get a stepped up basis at parents death. So gain will difference between prop value at parents death and sales price
Upon the death of your parents estates were formed. The home likely was sold from one of those estates. The estate is to report the sale and the gain or loss on its tax return (this is a fiduciary tax return, form 1041). Due to the step up in tax basis upon death, it is likely that the gain or loss will be very small. If the estate was terminated in the same year as the sale, the gain or loss will flow through of the four siblings.
However, if the house was distributed to the four siblings first, the reporting may be different. You need to present all the facts to a competent attorney or CPA.
Marty Davidoff, firstname.lastname@example.org, 732-274-1600. This answer is provided for general information only. You should seek advice from an attorney or tax professional.
As Mr. Davidoff explained, you will have to file a 1041 and the estate will owe tax on the sale of the real property and possibly for estate taxes. After those taxes are paid, you will receive your shares in the distribution of the estate.