Taxes Owed On Home Sold For $10?

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Summary: An heir sold her half of inherited property to her sister for $10 using a quit claim deed and wonders if she owes taxes on the sale. The taxes owed, if any, will be small because of the low sales price.

Dear Ilyce: My sister and I inherited joint ownership of our parents' home. She lives there, I do not. I sold my share to her with a lawyer-prepared "quit claim deed" for the nominal price of $10. Am I liable for any taxes as the result of the sale?

You may be, but if you sold her the home for $10, and you have owned the property for at least a year, your capital gains tax is either 5 percent or 15 percent of the profit, depending on your income. On $10, that would run to 50 cents or at most $1.50. My guess is you don't owe anything, although you probably have to report the sale. Talk to your tax advisor for details.

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Related Topics

• capital gains, 
• joint tenants, 
• quit claim deed

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