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Tax advice for partnership
Hi,
I'm looking for a CPA to give advice on a tax situation in the southwest suburbs of Chicago. I don't know where to look to find the answer to this specific situation: I have partners with an inherited home. They live out of state and do not want to be hands on with rehab and sale. I will be handling that portion, but my question is how to get them the lowest tax bill. My understanding is they would only pay capital gains tax on the appreciation of the property since they inherited it, but how is that decided? If we do a HELOC to finance the rehab, is that appreciation determined by the difference in the sale price versus what the appraisal for the HELOC was? Alternatively, would it be better to finance the rehab with hard money or private money, thus skipping the need for an appraisal before rehab? This would be my first partnership, and I was just wondering how best to protect them from a higher tax bill. Thanks so much for any advice on CPAs in my area, or any insight!