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Lev
Lev, Tax Advisor
Category: Tax
Satisfied Customers: 28084
Experience:  Taxes, Immigration, Labor Relations
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in 2008 I sold my mother home for her. My brother and I decided

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in 2008 I sold my mother home for her. My brother and I decided that we would put part of her money in CDs so they could get interest and be safe from her trips to the casino so she'd have it when she needs it as she is 82. When I went to the bank I explained to the banker what I was doing and he suggested I put them in my name as in the the past she cashed out CDs she had and spent them at the casino. I got one for $25,000 and one for $10,000. What I was wondering is do I have to do anything with taxes either for her or on my husband and my taxes because of these CDs? I also have power of attorney and she has been diagnosed with dymencia (spelling). She is living with my brother right now in a mobile home from some of her house money and will be moving with me when she isn't able to live there anymore because of her condition. She isn't good with kids and I have my son at our home until college in a few years otherwise she would be with me now.
Submitted: 7 years ago.
Category: Tax
Expert:  Lev replied 7 years ago.

If your mother sold the house that was her primary residence - she most likely did not have any taxable gain assuming she owned and lived in the house at least two-out-of-five years before the sale an d her gain is less than $250,000.

 

On CDs - as you was the primary owner - you owe tax only on the interest - please verify the amount of interest reported on the form 1099-int - http://www.irs.gov/pub/irs-pdf/f1099int.pdf

You will not owe taxes on the total value of the CD.

 

Please verify - the amount reported on the 1099-int and on which name the form is issued.

 

Lev and 3 other Tax Specialists are ready to help you
Customer: replied 7 years ago.
So on the CDs I won't have to report the original monies put into the Cds just the interest that was aquired on the CDs from the bank for the years interest is received? They were got in 2009 so I won't have to pay any taxes on the interest until next year correct?
Expert:  Lev replied 7 years ago.

That is correct - the money you put - are your money and are not your income. The interest earned - is your income. This income is taxable when it is credited to your account - not when you take it out.

 

If the interest was credited in 2008 - is taxable o 2008 tax return; if the interest was or will be credited in 2009 - it will be taxable on 2009 tax return

 

The amount of interest should be reported to you on the form 1099-INT - http://www.irs.gov/pub/irs-pdf/f1099int.pdf

If you did not receive that form from the bank or misplaced it - just contact the bank and ask for duplicate.

 

Customer: replied 7 years ago.
Thank you for your help. Hopefully you recieved your payment.Thank you again.