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#1 by Steve D at June 9th, 2009
It will depend on the stepped up tax basis of the house plus how much you sell the house for. The sale will be considered capital gains, with some exclusions because it is real estate. Check with a tax lawyer or accountant - be prepared to provide market estimates of the value of the house as well as a market appraisal for the house now.
#2 by Bogey at June 11th, 2009
It would seem that you would have to use your mother’s basis in the house for the 1/3 interest as this looks like a gift. You would add that to 1/6 of the fair market value at date of death to determine your basis. The basis is deducted from the sales price (as are selling expenses) to determine your gain which would be a capital gain.
Please consult with an attorney or CPA, as I may not have a full understanding of the facts.
#3 by kate at June 13th, 2009
Are you living in it as your primary residence for at least 2 years ?
Taxes differ depending on occupancy .
And if it has been used as a rental , the business income and expenses will factor in .
Too many variables and Not enough relevant info .
>
#4 by Judy at June 14th, 2009
The term is quit claim, not quick claim.
Your basis on the first 1/3 is 1/3 of whatever your mom’s basis was. The basis on the 2nd portion that you inherited is 1/6 of the basis when she passed away. Add them together.
#5 by Mathew at June 16th, 2009
You would start with your mothers basis. 1/3 of that plus the $100 and any other cost associated with the 94 transaction. To that you add 1/6 of the fair market value of the property on the date of your mother’s death. If there has been any improvement to the property along the way you would add to the basis your proportionate share in the property at the time of the improvement. The basis could also be effected by what you have been doing with the property during your ownership and in particular since your mother’s passing. For example, should you have rented the property during that time there would be an adjustment required to determine the basis. This can become a rather complex issue for which you may wish to have a tax professional review the circumstances.
#6 by Anna at June 17th, 2009
You are obviously not selling 50% of a house for $100,– you are only going to put that amount on the quit claim deed. The amount on the deed has no bearing on the amount you report on your tax return. You will have to report the amount of the gross sales price.
You basis in the property is determined when and how you acquired your interest. I am assuming that the 1994 l/3 was on the death of your father. If an estate tax return was filed, your basis would be l/3 of the value of the house declared on that return. Add to that basis l/2 of the amount shown on your Mother’s estate tax return in 2001. This should be your basis before depreciation and any improvements.
If neither estate tax return was filed, then you need to go to the County Assessor’s office and see the property evaluation in 1994 and again in 2001. This will give you a ballpark value.
What have you been doing with the property since 2001? If you have been renting it, then you should have been taking depreciation each year. Did you do any major repairs or improvements in the last 7 years which could add to your basis.
So, your basis is:
l/3 of the value of the house in 1994
l/6 of the value in 2001
plus any improvements
plus cost of sale and fixing up expenses
minus any depreciation.
If you have been renting the property, you need a tax professional to do your tax return since you may have to recapture some depreciation. The sale of a rental house is considered a capital asset and capital gains tax would apply.
If the house has been sitting vacant, then it is not a capital asset and the sale of the house would be taxed as ordinary gains.
If you have used the house as your personal residence, then you may exclude 50% of the profit up to the $250,000 limit.
If you are transferring a valuable piece of property to another person for the $100 you mentioned above, then you are making them a gift of the difference in the value today and your basis. You will be required to file a gift tax return and pay taxes if the value exceeds the gift limitation.
I believe I have given you enough information so that you realize that you need a good accountant to go over your plans and lead you in the right direction so that you don’t set yourself up for a whole lot of problems by doing the first thing that comes into your head without the benefit of competent counsel.
Good Luck!!!