I have a client who inherited a house with his sister in 2019. They sold the house in 2024 and my client had the proceeds given to his sister.

[bob808]

I would like to file a gift tax return for my client giving his sister half the value of the house before selling it. On the gift tax return his share of the value is $204,500. When he inherited it his basis was $131,850. Will he owe tax on the difference between the value and the basis? Thank you.

[BobKamman]

If he deeded it to her before the sale, she reports the gain.  If he still owned half when it was sold, he reports his share of the gain. 

Was the house just sitting vacant for five years?  

[sjrcpa]

Were any improvements made from date of death til sale?

[IRonMaN]

Did they own any chickens?

Oh wait, scratch that - wrong post.

[bob808]

The sister lived in the house after the parents passed. The brother was not lving there at the time he moved out years before their passing.

[bob808]

No improvemnets. The sister lived in the house and has no issue claiming the profit since it was less than the $250,000 exclusion she will get.