tax ? on selling my 1/2 of property to co-owner

[starty]

my brother and i joinly own a vacation property in minnesota. the deed is in both of our names. it was a gift from our grandparents. there is no mortgage. i want to sell my half to my brother for many reasons. i need to find a way that i won't get hit with high taxes when i sell it to him. we had discussed paying me in incriments. what kind of taxes do i have to pay? how much will i have to pay? is there any way to avoid paying taxes? the total amount he is giving me is $38,000.

 

[loku]

Sale of gifted property

Before knowing the amount of tax, you must figure your gain on the sale. In your case that will be $38,000, less your basis in the property. And your basis for a gift in the case of a gain in a sale is the basis the property had to your grandparents at the time the gift was made.

If you will receive any of the proceeds from the sale of your investment property after the year of sale, you may have an installment sale. Generally, you report gain from an installment sale using the installment method. Under this method, you report part of the gain each year that you receive a payment. For information, see Form 6252 and IRS Publication 537. Here is the link to the IRS site where you can download the Publication and the form.