Parent purchase house 10 years agofor 80,000( costs included.).
Five years ago has her three childrens names put on deed when the house FMV is
60,000.She goes into assisted living and they sell the house for 70,000.
Three kids have to put their portion of sale on tax returns? Would their basis be the origianl basis or the FMV when transfered?
Mom would fall under the personal residence exclusion.
Loss go on return, and where?
Thanks
be the origianl basis or the FMV when transfered?
I assume these were gifts by mom to the three kids and after the gifts each of the four individuals had a 1/4 interest in the property.
You say "parent" purchased the home. What about dad? Was he an owner, then passed away?
IF dad was never an owner the answer is: Mom owes nothing and reports nothing on her tax return; each of the kids reports his/her share of the proceeds ($17,500) and basis (also $17,500) on Schedule D; the kids' basis equals proceeds because of operation of federal gift tax law.
By the way, mom should have filed a gift tax return in the year the gifts were made.
is 60,000.
basis be the origianl basis or the FMV when transfered?
the four individuals had a 1/4 interest in the property.
on her tax return; each of the kids reports his/her share of the proceeds ($17,500) and basis (also $17,500) on Schedule D; the kids' basis equals proceeds because of operation of federal gift tax law.
Bill Brown's answer is correct. However, it is Section 1015 of Title 26 Subtitle A Income Taxes, (basis of property acquired by gift) that contains the rule Mr. Brown used, not gift tax law (Subtitle B).
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