Brother and Sister own a condo. She lives there an dhe does not. If the brother paid for prior year's improvements does he get the entire amount as an addition to basis? Or is it treated as a gift of 1/2 to the sister, therefore he only gets to claim 50%?
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Two unrelated parties would undoubtedly have had an agreement in writing as to who puts in what amount and how the proceeds from sale would get split.
In your case, if everything is silent as to how transaction are handled, I would assume it is a 50% increase to basis and 50% gift to sister. If that is not the intended consequence, obviously they should have some agreement that adjust the eventual sale price.
In the alternative, it could be structured as a loan, -
brother paid for the improvements so i would think it would be added to his basis.Comment
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