<prompt> Human: My grandmother recently passed and my father and his five siblings are selling the house. Its worth maybe 230k. They have been the owners on paper for around 20 years. My fathers brother said that they would pay capital gains tax but my father thinks its income tax. Eventually there will be a lawyer involved but I was hoping maybe someone here could shed a little light because I have no clue.  <response>: If theyve owned the house for 20 years, and the house is not the primary residence of any of them, they will pay capital gains tax on the difference between their selling price minus selling expenses and their cost basis essentially what they paid for it plus any capital improvements they made to the house and can document. This would not be taxed as ordinary income. 