Question for the Money Doctors
Question submitted on Dec 28, 2010.
QuestionMy sister, daughter and myself are partners in a famliy ranch that we inherited from my parents. We just sold 57 acres for 66,000.00. What do we need to do for income taxes,? we will split the 66,000.00 between the 3 of us.
Thank you, Robert Hegge
The sale of any real estate is a complicated issue and you should seek competent tax and financial advice from a CPA.
The answer to your question is complex because it depends upon many factors. Usually there is a step up in the cost basis of inherited real estate. This means the cost basis of the property is the value at the time of your parents death. Then the cost basis gets allocated for the amount that you sold. The difference will be a gain or loss. You split this gain or loss among the three of you.
This answer gets more complicated if your parents passed away in 2010.
I cannot provide a complete answer for you here. More facts and analysis is needed. Please consult a competent tax and financial advisor. It will be worth it - too many things can go wrong
For additional information visit http://www.360financialliteracy.org/