Q: My mother died in FL. My sister (who lives in the house) wants to buy my share of the house for $29,000. I live in NC.
Do I have to claim the $29,000 as income or can I claim it as inheritance?
A: Assuming that the house hasn't appreciated since you inherited it, the proceeds would not be taxable as income, and although taxable under state and federal inheritance taxes, would probably be under the exclusion amount. If it did appreciate, the capital gains would be taxable income.
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