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How is capital gains tax calculated if my 2 brothers buy me out but sell the house in the future?

San Diego, CA |

My 2 brothers and I recently inherited a house. If I sell my share to them I assume i will incur capital gains tax above the date of death value. What happens if they sell the house in 5 years? Are they responsible for capital gains from my mother's date of death between the 2 of them or are they credited an amount since they bought me out?

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Attorney answers 3

Posted

They should check with an accountant as to the capital gains in 5 years. Who knows what the law will be then.

Mark here if this answer is helpful

Posted

This is a CPA question not a legal question.

The foregoing is for informational purposes only and may not be relied on as attorney-client advice.

Posted

Your capital gains are determined at the time of YOUR sale. If they later sell the property, it will be irrelevant to you. Their basis in your share will be wait they paid; their basis in their inherited shares will be DOD value. In other words, the property will have split basis calculations.

THESE COMMENTS ARE NOT LEGAL ADVICE. They are provided for informational purposes only. Actual legal advice can only be provided after consultation by an attorney licensed in your jurisdiction. The answer to question does not create an attorney-client relationship or otherwise require further consultation. Mrs. Cook is licensed to practice law throughout the state of California with offices in San Diego County. She is authorized to handle IRS matters throughout the United States, and is also licensed to practice before the United States Tax Court. IRS CIRCULAR 230 DISCLOSURE: To ensure compliance with requirements imposed by the IRS, please be advised that any U.S. federal tax advice contained in this communication (including any attachments) is not intended or written to be used or relied upon, and cannot be used or relied upon, for the purpose of (i) avoiding penalties under the Internal Revenue Code, or (ii) promoting, marketing or recommending to another party any transaction or matter addressed herein.

Asker

Posted

Just curious how it would affect them if they sell in one year for instance.

Amanda Marie Cook

Amanda Marie Cook

Posted

Capital gains and losses are proceeds +/- adjustments to basis - basis - expenses. Their basis calculation will be based partly on date of death value assuming the property was inherited, as you said, and partly on what they pay you.

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