Finance Questions? Ask a Financial Expert for Answers ASAP
Hello! I am a CPA here to assist you with your tax questions. My goal is to provide you with excellent service today.
1) When you sell the house, you will pay tax on the gain that exceeds the purchase price of your home. If you gift the proceeds, there's no tax implications of the gift, although you may still owe tax on the sale.
2) Since you are moving out of state for work, you can exclude a portion of the sale - take the total months you are there, divide by 24 and multiply that by $500,000. That's your maximum exclusion. Gains below that amount are tax free.
3) If you are renting below market rent, you claim the income you receive from him as other income on line 21 and deduct your expenses up to the amount of rent on schedule A.
Please let me know if you need anything additional. If not, please rate my response as Excellent so that I may receive credit for assisting you today.