asked

My sister and I are joint tenants selling a house together. My sister's income is above $500K/yr, and my retirement income is about $60K/yr. I have been paying property taxes for the last 20 years, and the capital gain on the property is about $500K. Should each of us take 50/50 of the capital gain in paying taxes? Should my sister absorb all the 100% tax of the capital gain or me? Some people told me that if my sister pays the capital gain tax, that is a "Red Flag" for audit because my name has been on the house for 20 years, then her name suddenly appears out of nowhere. Is this true? Please help me understand the choices I should make to ensure a smooth selling process without audit.

July 21st, 2024

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