Real Property Sold by Parent to Siblings

[stalgeh]

Hi,

I have a client who is living in a house was sold by the father to his 3 siblings during his life for more than 20 years ago or more (I do not know if they consider it as gift at that time and paid gift taxes - Client does not know). After years, my client move to live in the house and his other two siblings transfer the title under his name without money involvement (5 years back or more). The house get flooded under hurricane Harvey and to calculate the gain or loss, I need to determine the bases of the house.

My questions:

1- Do we treat the transfer transaction from the 2 siblings to their brother as gift?

2- If client or siblings did not pay gift tax, can we file it in 2017?

3- How about the client share he received from the father and not involve the transfer from siblings? How it can be treated?

Thanks,

Chad

[Burke]

1. Yes, and the basis is whatever their basis was. (See #3)

2. That is for the transferors (siblings) to decide. It does not appear your client gifted anything.

3. This seems to contradict your first statement and indicates it was sold to your client AND other siblings (3 parties.) If that is the case, his basis is the share he paid for it plus any improvements, plus whatever the other siblings' basis was.

[stalgeh]

1. Yes, and the basis is whatever their basis was. (See #3)

2. That is for the transferors (siblings) to decide. It does not appear your client gifted anything.

3. This seems to contradict your first statement and indicates it was sold to your client AND other siblings (3 parties.) If that is the case, his basis is the share he paid for it plus any improvements, plus whatever the other siblings' basis was.

Thank you Bruke! You are right about point#3. The father sold the property to his children and not gifted it to them.