How JustAnswer Works:
  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.
Ask Jon Andrews Your Own Question
Jon Andrews
Jon Andrews, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 3118
Experience:  I deal with all levels of tax planning and controversy - from the ordinary to the complex.
4750
Type Your Tax Question Here...
Jon Andrews is online now
A new question is answered every 9 seconds

Real Estate Capital Gain Tax

This answer was rated:

In 1964, my parents purchased a home for $12,500. In 1984, they transferred the home to me on a Quitclaim Deed. No money was exchanged.

In 2004, I sold the house for $335,000. In 20 years, when I owned the home, I made many improvements -- siding, porches, roof, updated kitchen and bathrooms, heating, electrical, etc. -- but I don't have all the receipts. And,I do not have all the receipts for the time my parents owned the home and made improvements. Also, this was not my primary residence prior to the sale. However, it was my primary residence from 1984-1998.

Is there a dollar amount per year (for improvements made with out receipts) that is acceptable? Also, can the improvements paid for by my parents when they owned the home be used as well since the property was transferred?

Thank you,

Answers in reverse of questions -


Your initial basis would be the same as that of your parents, so improvements that they made would count in determining your gain.


There is no "allowable amount" per year. Your best bet is to try to make a list of the major improvements that you made, when you made them (at least the year), and how much they cost (approximately). You should remeber the cardinal rule in situations such as this - Pigs get fat and hogs get slaughtered. Translated - if you make a reasonable effort to come up with realistic numbers, you will probably be OK. If you come up with some wild guesses that make it look like you made no money, you are likely to get hammered by the IRS if they audit your return. There is no guarantee that they will accept any number without the receipts, but, generally, they are reasonable if you are reasonable.


Since this has not been your primary residence for 2 of the last 5 years, you will subject to long term capital gains tax on whatever gain there is.


[email protected] 
Jon Andrews, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 3118
Experience: I deal with all levels of tax planning and controversy - from the ordinary to the complex.
Jon Andrews and 3 other Tax Specialists are ready to help you

P.S. The "quitclaim" in 1984 could also represent a problem. From the sounds of things a gift tax return was not filed. It is almost certain that the value at that time was in excess of the amount that could be given and not be subject to gift tax. If no gift tax return was filed, then there is no statute of limitations with respect to that and you/they could wind up with an even bigger problem.


[email protected]
Jon Andrews, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 3118
Experience: I deal with all levels of tax planning and controversy - from the ordinary to the complex.
Jon Andrews and 3 other Tax Specialists are ready to help you
Customer: replied 11 years ago.
Reply to Jon Andrews's Post: My parents are both dead. Can you clarify what you mean I/they could end up with a bigger problem?

How would I find out if they filed a gidt tax return, are these still available 20 years later?

Thank you

If estate tax returns were filed subsequent to their deaths, the gift tax returns would have been noted on them, if any were filed.


If estate tax returns were not filed because the estates were not large enough for them to be required, you are probably going to be OK with repect to the gift tax issue.


The potential problem is that, since there is no statute of limitations if a return was not filed, the IRS could even now assess gift tax.


I do not mean to over-alarm you, but you do need to be aware of the situation. If you could provide me with some basic information about your parents estates, I could give you a better idea of whether or not there is any real cause for concern. General information would be the year of death for each, whether or not you have siblings, and your best guess as to the value of the assets that they owned at the time of their deaths. There may be some additional questions after I look at the initial information.


It would be preferable to not post this information publicly. you can send it to me privately using the "PM" button that will show up if you click my name on the left side of the screen. 


jon

Jon Andrews, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 3118
Experience: I deal with all levels of tax planning and controversy - from the ordinary to the complex.
Jon Andrews and 3 other Tax Specialists are ready to help you

JustAnswer in the News:

 
 
 
Ask-a-doc Web sites: If you've got a quick question, you can try to get an answer from sites that say they have various specialists on hand to give quick answers... Justanswer.com.
JustAnswer.com...has seen a spike since October in legal questions from readers about layoffs, unemployment and severance.
Web sites like justanswer.com/legal
...leave nothing to chance.
Traffic on JustAnswer rose 14 percent...and had nearly 400,000 page views in 30 days...inquiries related to stress, high blood pressure, drinking and heart pain jumped 33 percent.
Tory Johnson, GMA Workplace Contributor, discusses work-from-home jobs, such as JustAnswer in which verified Experts answer people’s questions.
I will tell you that...the things you have to go through to be an Expert are quite rigorous.
 
 
 

What Customers are Saying:

 
 
 
  • I really was impressed with the prompt response. Your expert was not only a tax expert, but a people expert!!! Her genuine and caring attitude came across in her response... T.G.W Matteson, IL
< Previous | Next >
  • I really was impressed with the prompt response. Your expert was not only a tax expert, but a people expert!!! Her genuine and caring attitude came across in her response... T.G.W Matteson, IL
  • I WON!!! I just wanted you to know that your original answer gave me the courage and confidence to go into yesterday's audit ready to fight. Bonnie Chesnee, SC
  • Great service. Answered my complex tax question in detail and provided a lot of additional useful information for my specific situation. John Minneapolis, MN
  • Excellent information, very quick reply. The experts really take the time to address your questions, it is well worth the fee, for the peace of mind they can provide you with. Orville Hesperia, California
  • Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help. Mary C. Freshfield, Liverpool, UK
  • This expert is wonderful. They truly know what they are talking about, and they actually care about you. They really helped put my nerves at ease. Thank you so much!!!! Alex Los Angeles, CA
  • Thank you for all your help. It is nice to know that this service is here for people like myself, who need answers fast and are not sure who to consult. GP Hesperia, CA
 
 
 

Meet The Experts:

 
 
 
  • Wallstreet Esq.

    Wallstreet Esq.

    Tax Attorney

    Satisfied Customers:

    577
    10 years experience
< Last | Next >
  • http://ww2.justanswer.com/uploads/KU/KUMI95/2013-9-30_195031_kumar.64x64.jpg Wallstreet Esq.'s Avatar

    Wallstreet Esq.

    Tax Attorney

    Satisfied Customers:

    577
    10 years experience
  • http://ww2.justanswer.com/uploads/CATax/2009-08-04_204548_Mark.jpg Mark D's Avatar

    Mark D

    Enrolled Agent

    Satisfied Customers:

    1245
    MBA, EA, Specializing in Business and Individual Tax Returns and Issues
  • http://ww2.justanswer.com/uploads/IN/insearchoftheanswer/2013-8-16_0233_attorney.64x64.jpg Richard's Avatar

    Richard

    Tax Attorney

    Satisfied Customers:

    3882
    29 years of experience as a tax, real estate, and business attorney.
  • http://ww2.justanswer.com/uploads/TA/TaxRobin/2013-8-28_16186_femalebusinessprofessionalbinderhand11038485.64x64.jpg Robin D.'s Avatar

    Robin D.

    Senior Tax Advisor 4

    Satisfied Customers:

    11072
    15years with H & R Block. Divisional leader, Instructor
  • http://ww2.justanswer.com/uploads/YI/yirtual/2015-3-12_43754_egan.64x64.jpg Megan C's Avatar

    Megan C

    Certified Public Accountant (CPA)

    Satisfied Customers:

    8621
    Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level
  • http://ww2.justanswer.com/uploads/JG/jgordosea/2012-6-7_43138_GordosVeritas.64x64.jpg jgordosea's Avatar

    jgordosea

    Enrolled Agent

    Satisfied Customers:

    2884
    I've prepared all types of taxes since 1987.
  • http://ww2.justanswer.com/uploads/FA/fastfile/2011-12-15_23139_Klein2011small.64x64.jpg R. Klein, EA's Avatar

    R. Klein, EA

    Enrolled Agent

    Satisfied Customers:

    1837
    Over 20 Years experience