Posted on: 22nd Mar, 2008 11:11 am
We have sold our parents' property on which 3 of us (sisters) are included. We have been told that we will each get 1/5 of the proceeds of the house. What are these proceeds considered (income, capital gains) and how is this claimed on our taxes?
Thank you.
Sue
Thank you.
Sue
Hi Sue,
Welcome to forums.
Generally if you sell off a property at a higher price compared to what you bought it for, then the difference is the capital gains. The gains is regarded as income on which the seller has to pay taxes provided he does not qualify for capital gains tax exemption .
I'm not sure as to how each of the co-owners can determine how much taxes they'll have to pay on the gains. I think it's better if you can consult a tax advisor.
Thanks
Welcome to forums.
Generally if you sell off a property at a higher price compared to what you bought it for, then the difference is the capital gains. The gains is regarded as income on which the seller has to pay taxes provided he does not qualify for capital gains tax exemption .
I'm not sure as to how each of the co-owners can determine how much taxes they'll have to pay on the gains. I think it's better if you can consult a tax advisor.
Thanks
Hi Sue,
Welcome to forum.
James has rightly said that if you have gained any amount of money compared to what you have bought the property, you will have to pay tax on it. But you can even get $250000 of Capital gain tax exemption.
Now to decide who will pay how much of tax or how can you avoid the tax, you should contact with a tax attorney.
Best of luck,
Larry
Welcome to forum.
James has rightly said that if you have gained any amount of money compared to what you have bought the property, you will have to pay tax on it. But you can even get $250000 of Capital gain tax exemption.
Now to decide who will pay how much of tax or how can you avoid the tax, you should contact with a tax attorney.
Best of luck,
Larry