Welcome Guest. Register Now!  



Reply
 
LinkBack Thread Tools Search this Thread Display Modes
  #1 (permalink)  
Old 09-15-2015, 05:05 PM
Junior Member
 
Join Date: Sep 2015
Posts: 1
Buy out brother of inherited house

Hi,

My brother and I inherited our parent’s house in Jan. 2009. I am buying him out for 1/2 the current value.

I am married and neither of us has lived in the house since we inherited it. How do I claim the house on the CA form 593-C?



Digg this Post!Add Post to del.icio.usBookmark Post in TechnoratiFurl this Post!Reddit! stumble!bookmark in google!Share on Facebook!
Reply With Quote
  #2 (permalink)  
Old 09-16-2015, 04:19 PM
Moderator
 
Join Date: Oct 2010
Posts: 5,258
When your brother sells property to you , his tax basis for the property is the home’s fair market value on the day our father who willed it to him died. The difference between that value and the amount your brother realizes from the sale is the gain on which your brother owes taxes. So,for example, if the home was worth $300K when father died and your brother sells his portion, $150K, for $350K and then he claims a $25K gain.So, he needs to report it on his return as LTCG; gains on dispositions of assets held for more than one year. The long-term capital gains tax rate is either zero percent, 15%, if his tax rate is higher than 15% or 20% if his marginal rate is 38.6%, depending on your marginal tax rate.

If he sells for the value of the home or less, he doesn’t have a gain to report. Your basis on the home is 50% of the FMV oif the home when you inherited and your portion of the LTCG plus the purchase plus you paid to y our brother. For your sate return, you need to contact an IRS enrolled agent or a CPA doing taxes in your local area for more help in detail.



Digg this Post!Add Post to del.icio.usBookmark Post in TechnoratiFurl this Post!Reddit! stumble!bookmark in google!Share on Facebook!
Reply With Quote
  #3 (permalink)  
Old 09-16-2015, 04:22 PM
Moderator
 
Join Date: Oct 2010
Posts: 5,258
Upon payment for his share, he gives you a Quit Claim Deed. I guess you may see an attorney to make sure the Deed is in proper format, that there are no liens on the property and that the description of the property is accurate



Digg this Post!Add Post to del.icio.usBookmark Post in TechnoratiFurl this Post!Reddit! stumble!bookmark in google!Share on Facebook!
Reply With Quote
Reply


Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

vB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
House inherited; later gifted; cost basis Pam Buffington Capital Gains 2 11-04-2014 06:09 PM
Inherited House gr8smoke Capital Gains 1 04-19-2014 10:44 AM
inherited house kfabela Rental Real-Estate 1 04-04-2012 05:26 AM
Sale of inherited house TRSUMM Capital Gains 0 04-12-2011 06:11 PM
Inherited house luvthat48 Itemized Deductions 0 01-27-2010 12:10 PM

Follow us on Facebook Follow us on Twitter Google Buzz Rss Feeds

» Categories
 
Individual
 » Income
 » IRA/Sep
 » Medical
 
Corporations
 » Payroll
 
Forum for CPAs
 
Financial Planning
 
 
 

» Recent Tax Q&A
No Threads to Display.