Tax on sale of home

[dragonrider99]

Greetings All,

My wife and her brother inherited a home from their parents. They have been renting it for the past 3-4 years. During that time, they have made several improvements and upgrades to the house and property. The renter has offered to purchase the home in cash, and my wife and her brother have accepted the offer. My wife has a few questions that I am hoping can be answered here.

At the time of the last parent's passing, the home was valued at $425k when it passed into their possession. I assume that is the cost basis for any capital gains tax. The home is being sold for $415k.

Is the individual capital gains for each owner $250K, and if so, does that mean neither of them will have to pay a capital gains tax?

Will they have to pay a sales tax on the home since it was a rental property for 3-4 years? If so, how will it be calculated?

Will they have to pay Title Insurance for the sale, or is that the buyer's responsibility?

Finally, do they need to retain an attorney for the sale, or are they able to proceed on their own?

Thank you all for taking the time to read and respond to my questions. Take care

 

[army judge]

Someone is contemplating the sale of property worth in excess of $400,000. Only a fool would consummate such a transaction without the benefit of their own attorney.

That said, I wouldn't take free tax advice from an anonymous Internet site, when I'm selling something worth $400,000 plus.

I suggest sister and brother retain their own attorney to ensure their interests are properly protected.

Tax advice is not a one size fits all proposition.

Please, don't be cheap, spend some money to ensure all goes well.