Mesa, AZ asked in Real Estate Law and Tax Law for Colorado

Q: How do I sell a 0.26 acre lot left behind in Pueblo County, CO after my parents’ passing?

I have two sisters that want me to sell the lot and split it three ways. I don’t want to be liable for the taxes in their entirety after the sale. What kind of document do I need from them before I can sell the lot? How do I avoid the entire tax liability? Neither of us want the lot.

Thank you.

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1 Lawyer Answer
Agustin  Arbulu
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Agustin Arbulu
Answered
  • Tax Law Lawyer
  • Southfield, MI

A: This is an important question posed. As I understand it your parents left you and your sister a piece of property. I am assuming the property was to be owned jointly with your 2 sisters. Further I am assuming the property is in your name for convenient purposes (like to avoid probate). If that is the case, I recommend you quit claim the property from you to your 2 sisters and yourself making sure that you indicate as follows: "X quit claims her interest in the property to X, Y, and X as tenants in common." With tenancy in common each person has a distinct interest in the property, which means one person can sell her interest w/o approval from the other tenants in common. Another approach is to quit claim the property from you to your 2 sisters and yourself as joint tenants. This would read as follows: "X quit claims her interest in the property to X, Y, and X as joint tenants." A joint tenancy means each person holds an indivisable interest in the property and thus rights of survivorship. As joint tenants each person can not sell her interest. Now on the sale of the property each of you would be required to sign off on the deed transferring the property to the new buyer. Further each sister would be liable for their share of the tax liability arising from the gain and not the entire amount of the tax liability. However, make sure that the SSN (social security number) of each sister is provided at closing so that any 1099 form issued is sent to each sister proportionate to her interest (1/3) in the property sold. This form is usually issued by the buyer at the end of the year but not always.

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