I help my dad with his taxes every year. His sister passed away in '14. She left her house to her 2 brothers and sister. The other brother has since passed away so it just my dad and his sister. They all received the proceeds from the sale of the house in '16 about a year ago. He is trying to figure out how to account for the money on his taxes. He did not receive any type of tax form from their attorney who helped settle her estate. I told him that proceeds from the sale of a house isn't taxable until it reaches $250,000 per the IRS. However we aren't sure how the proceeds are being classified, i.e., proceeds from the sale of a house or as inheritance? Plus my aunt says the estate taxes have not been paid either. Not sure what to do here.
Your advice to your father was flat out incorrect. He needs a professional tax return preparer. He will owe tax on his share of the increase in value of the house from the date of death in 2014 until the date of sale. It might not be much at all.
This is not intended to be legal advice, and is general in nature.
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