<prompt> Human: My brother and I inherited a house from our uncle which I intend to keep so I am buying him out. His half would be 210K and our lawyers have told us that upon closing they will deduct about 950 in tax from that total, but my brother believes he will be taxed much more, up to 45K worst case, so he would like me to account for the taxes and give him more in the payout so we each get a true 5050. Can anyone offer insight to this? I am not sure how his accountant is coming up with these numbers, unless the payoff will count as taxable income when he does his taxes next year? Edit: Dont worry kind strangers, I wont be blindly taking the advice of the internet and will defer to the lawyers, just trying to get a feel for if his suggestion is as outrageous as I think it is. Thanks!Second Edit: I shouldnt have called it an inheritance; our mother added our names to the deed upon my uncles death hers was already on it. This makes all the difference in the world, it seems.Assistant: Half the house value belongs to him. Plain and simple.The tax burden he faces, whether its 950, or 45k, also applies to you were you to sell the house correct? So if you gave him the full 210k, plus an additional 45k, then he would receive 255k and you would receive 165k in equity. Were you to ever sell the property, Im assuming you will owe the same amount in taxes as he would. Therefore, youre netting 120k and he nets 210. He gets 210, you get 120. Thats not exactly a true 5050 if you ask me. I cant think of a scenario in which he would be responsible for 45k in taxes and you wouldnt. Its an inherited asset, and therefore part of the estate exemption presumably. If there is a really low cost basis they are working off of, then you will also need to work off that same cost basis when you go to sell the house. In other words, his tax burden is his and his alone, since you will most likely be responsible for whatever he is responsible should you ever sell the house. Feel free to correct me if Im missing some weird loophole though.EDIT: MathHuman: Thanks for the response. I should add that this is not technically inherited property, our mothers name was already on the deed and she just added ours and removed our uncles when he passed. Not sure if that makes a difference. He is also not asking for the full 45K, just would like me to pay a little extra no hard numbers yet so its more even, since he knows I intend to live in the house indefinitely and in his mind I have been able to put my half, 210k, down for this house while he will only be able to put 165k down on his own home purchase.  <response>: I see, thanks for the clarification. I believe this makes what Ive said more concrete in a way. If it is not inherited property, you will both be responsible for the same taxes should you ever sell your portion. Even if you sell for double what the house is worth now, youll still have the same cost basis for your half. Therefore, I do not believe you should do anything but give him:House Value - Appraisal - Attorney - Fees 2. Or simply half the house value where you split the fees out of pocket. The tax burden is his, and his alone, just as yours will be as well. 