Sale of deceased parents condominium

[MikeInAA]

What is the name of your state (only U.S. law)? Condo sold in Virginia

My parents bought a condo in Virginia in ~1997 for $120K. They put my bother's and my name on the deed as co-owners when it was purchased (we never lived there). It's unknown if our parents filed a gift tax (is there an exclusion?). Our mother died in 1999 and our father died in 2007. My brother and I sold the condo in January 2008 for $190K. The question is, how do I deal with this on my taxes? Originally, I thought that my brother and I would split taxes on the gain, ie., long term capitol gains on $35K each. Now I'm not so sure because of other advice I've read. Assuming I have to file capitol gains, where in the myriad of tax forms does it go?

And, a side question...why would my father have done it this way, as opposed to having us inherit the condo through his will?

Thanks in advance for the advice!What is the name of your state (only U.S. law)?

[FlyingRon]

There's a million dollar lifetime gift/estate tax exclusion. Unless you parents had a lot of assets it probably wasn't reached.

How was ownership held? How were you able to clear the names of the deceased from the deeds?

Your original gifts have the "basis" of what your parents paid. The parts that they retained that you presumably inherited was stepped up to the value on their respective deaths. Therefore, a little research can probably lower the taxable capital gain amount.

Why your parents did this is beyond me. It is by and large a bad idea to place children on the deed like this.

You report the gain on 1040 schedule D for the feds and also on your Virginia 503. The long term gain would be 15% for feds and 5.75% for the Commonwealth.

[MikeInAA]

Thanks for the reply, FlyingRon...

I'm not sure why my father decided to put us on the deed (he was pretty sharp, but maybe got some bad advice). Nonetheless, all four of us were co-owners. Our parents names stayed on the deed until settlement, when another deed was drawn up that indicated they both were deceased, and that my brother and I were the surviving tenants with rights of survivorship. Of course, the buyer was listed as the grantee.

When our father died in March 2007, the condo was appraised at ~$240K, and then the real estate market really began to tank. So, it's all pretty confusing. Sounds like this may be a little more complicated than we originally thought...

[HomeGuru]

Originally Posted by MikeInAA

Thanks for the reply, FlyingRon...

I'm not sure why my father decided to put us on the deed (he was pretty sharp, but maybe got some bad advice). Nonetheless, all four of us were co-owners. Our parents names stayed on the deed until settlement, when another deed was drawn up that indicated they both were deceased, and that my brother and I were the surviving tenants with rights of survivorship. Of course, the buyer was listed as the grantee.

When our father died in March 2007, the condo was appraised at ~$240K, and then the real estate market really began to tank. So, it's all pretty confusing. Sounds like this may be a little more complicated than we originally thought...

**A: when father put you guys on the deed, what was the type of tenancy; joint or tenants in common?

[MikeInAA]

Originally Posted by HomeGuru

**A: when father put you guys on the deed, what was the type of tenancy; joint or tenants in common?

We were added as joint tenants, which provides for rights of survivorship (stated in the original deed). My father, mother, brother, and I were all listed as "Joint Tenants with the Common Law Right of Survivorship."

[HomeGuru]

Originally Posted by MikeInAA

We were added as joint tenants, which provides for rights of survivorship (stated in the original deed). My father, mother, brother, and I were all listed as "Joint Tenants with the Common Law Right of Survivorship."

**A: my apologies as I got your post mixed up with another one. You asked about capital gains tax. Please post tax questions on the Tax Law forum.