<prompt> Human: I took over our family house 5 years ago but now we will be moving out and selling it. Have 300k left on it, can sell for around 900k. Of the 600k leftover, it will be split 503020 between the three of us. Will i run into any issues tax wise just giving the money to my siblings as seen by the eyes of the government? Assistant: Hello. Tax guy here. If I were you, based on your comments and correct me if I misunderstood anything you bought for 500k, it is now worth 900k. You have a 300k mortgage. Two things to consider, 1 Gift Tax Rules and 2 Capital Gains Tax. When you sell this house for 900k, you will have 400k in capital gains. Luckily, you can exclude 250k of those. Therefore, you have to deal with 150k in capital gains. At long term cap gains rate, that will be around 25k. I would take that 25k from each persons share depending on the 503020 rule. Now when you sell for 900k, in my opinion it is only fair that you first pull out all 500k in the home. You took 100 of the risk if it had dropped value by half would the others have sent you money? doubt. After that, I would take the remaining 400k and split it pursuant to your 503020 forumula. If I were you, id take the 50 because once again you took the risk. Therefore, If I was doing this transaction and wanted to do it like you are which I wouldnt. I put up all the risk and paid full price for that house. I would do it as follows. Sell for 900k, pull my 500k out. I would take 400k, and say 200k to one guy, 120k to another, 80k to another 503020. I would then take 12.5k, 7.5k, and 5k from those amounts respectively to cover taxes. As far as gift taxes, you once again are losing long term. Why? If you give 120k guy 120k, you lose 120k off your amount you can gift away without paying giftestate tax long term. That could be a big issue for you if either you build wealth or they lower the estate tax exclusion again. Now in my opinion, the only amount that they are due to the 200k difference between what it was purchased for and what it was appraised at Assuming the parents gave you a deal because you were going to do this. If that is the case, because of the risk you took, i would feel like all gains were mine and I would simply say the 200k gets split 503020 and still divy up cap gains taxes with you taking a 70 share or so since you are getting more gains. Human: Thanks for the breakdown and your advice! I will review this more when I wake up.  <response>: Make sure to adjust everything for inflation and take into account maintenance and improvement costs as well. Also you have to account for the risk involved somehow. 