Reply #5: important ... read this ...

[welshTerrier2]

your first post hadn't made it clear that the property was obtained as part of an estate ... it may be possible, i think as part of probate but not sure, to have the estate pay the taxes due on the sale if that happens before the property is transferred to the new owners (i.e. you and your siblings) ... if that didn't happen up front, then i'll stick with my original post ...

i'm also not that familiar with the whole estate thing, but i believe that when you inherit property, you can assume the basis from the estate ... so, for example, let's say this property was left to you and your siblings as part of the estate when your last surviving parent died, your basis (i.e. cost plus improvements) in the property would be the same as their basis had been on the day the property was transferred to you ...

so, if they had paid $25K to buy the property and added another $50K in improvements (e.g. new roof, paved driveway, added family room, etc.), their basis would have been $75K ... if you and your siblings sell the property for $99K and incur $9K in "selling costs" (e.g. advertising, fix up expenses, real estate commissions, etc.), your net proceeds would again be $90K ... the gain in this example would be only $15K ($90k - $75K) ... each owner would be responsible for reporting $5K as a gain on the sale of a residence ...

the important point here is to make absolutely sure that you are not just paying tax based on the "gross sales price" ... even though you weren't the people who paid for the house initially, you should be able to deduct your parents' costs from the amount you sell it for ... you really should read the booklet to ensure you're not overpaying ...