My dad lived in his home for 60 yrs and needs to sell it to supplement his care home. He included his 3 children on the ownership title. When the home is sold, each child will give back the profits. Is each child responsible for the 15% capital gains tax?

Has that deed ever been recorded? Normally, an instrument as that is drawn up as part of the estate papers to be filed in case of death which would keep the house out of the estate for tax purposes. If it hasn't been recorded then legally the house belongs only to your father.
If it has been recorded, are you sure there is going to be any capital gains? The housing market isn't all that good now. When doing a sale of residence, all the capital improvements made on the house over the sixty years will be added to the original purchase price. It could be a capital loss.
That being said, a 1099 will go out from the financial institution for all monies paid out. Those receiving a check will have to account for it. If the check issuer can be convinced to report it all to your father, it would be easier all the way around, and he probably won't be liable for any tax.
If the sibs each get a 1099, then each will have to report a 25% sale of residence. Their basis in the house will be the 25% fair market value of the house when the house was put in their names.
The circumstances are unknown, but Dad could be liable for a gift tax depending how and when the other names were added to the deed when recorded.
A good CPA may be needed.

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My dad lived in his home for 60 yrs and needs to sell it to supplement his care home. He included his 3 children on the ownership title. When the home is sold, each child will give back the profits. Is each child responsible for the 15% capital gains tax?

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My dad lived in his home for 60 yrs and needs to sell it to supplement his care home. He included his 3 children on the ownership title. When the home is sold, each child will give back the profits. Is each child responsible for the 15% capital gains tax?

Answers. 1 helpful answer below.

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