In the county the property is in, the assessment for property taxes is lower than the price the property would sell for. I'm not in real estate, but I work at a large institution and have heard story after story of people getting 25 or 30% more than the county's property tax assessment. However, the sister used this as a ball park for what it was worth then, and what it is worth now (this was to her advantage....it was clear if we wanted to buy the property it would be assessed and we would have had to pay more). Additionally, a church had to get it's share when the father died, and the executor paid off the church's share as its percentage of the county's assessed value (for taxes), thus adding the church's share to her percentage ownership.
None was done. Hubby wasn't living near by and the executor just moved in and stayed when the father died. Will was never finished, property remained in dead father's name, sister paid the taxes and raised goats on it.
Since the value of the property was probably more than X at time of death, and we took less than the property value as pay-off this year, I'm thinking we are "safe" in paying capital gain on half of it. If we were claiming the amount the property was worth at time of death was more than what is on the books for the county's assessment, in order to show we had less capital gain, that might be less "safe".
My goal here is not to save every penny. I have deducted my bracket income tax rate for half of the amount we got, and put it aside for when I do our taxes next year. What was left over was sent on to hubby's kids. *My goal is to NOT get into trouble with the IRS*. Anything I over-pay (we are talking about a tax payment of 4000 bucks, not tens of thousands) is money out of the daughter's pockets, not mine. All the time, effort, insult-bearing, and soul-searching has been enough, I'm not going through extra hoops for these girls. I just don't want to get into trouble...
Hubby signed over his interest in the property to his sister, in exchange for money. All 3 other sibs and nieces are signing over their share for an IOU (I knew we'd never get that money without going to court, so insisted on money at time of signing...we will be hated for life, but really I could care less). The reason this is moving forward now, I think, is that she knew the assessed value was going up 24% from
2007 and 2008, and hence was eager to "lock in" on 2007 price (the last week of November 2007, no less). She then did nothing on moving forward on closing, as once she had the "locked in" price, any payment was her money going out the door. I had to threaten to get her to give the attorney the info he needed to contact all parties concerned, etc.Given past history, I will not get any form from this sister in law without calls and possibly threats. Should I just write this all out, have my attorney give it a glance for proper lingo and tone, and send it in with my 1040?
Our biggest crap shoot in life is who we are born to. I am grateful daily for my genes and upbringing, and hubby is happy to have married into a honest family who knows that good fences good neighbors make.
I am also grateful for your help.