Expert: Dick Dennis - 2/17/2009

Question
Dick, My mother passed away in Tennessee. She owned 2 residential properties. She left them equally to her 4 children. Two of us plan to take ownership of one property and two of us to the other property, via quit claim deeds.
My brother wants me to then buy him out of his half of the property he and I would jointly own. Then as sole owner of that property I plan to sell it. But before I agree to this I am wondering what my tax liability may be? Would my brother in this scenario eliminate his tax obligation? The house is worth approx. $200,000 and was purchased for approximately $150,000. I reside in California. Thank You!
Susan  

Answer
First, Susan, you have to establish the value of the property at the time of your mom's passing. Divide that in two. And that is your tax basis. You would then be responsible for any capital gains tax from that point. This is just superficial. I strongly suggest you take your brother and go to a CPA or other tax expert and submit this problem to him or her. It is best to pay for this proper advice than to take a chance of later on being subject to an audit or additional tax. Or worse, paying too much tax now. I do wish you well.

Dick Dennis
dixiedee13@aol.com