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Wendy Reed
Wendy Reed, Enrolled Agent
Category: Tax
Satisfied Customers: 3346
Experience:  15+ years tax preparation and tax advice.
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QUESTION FOR WENDY RIEGER Wendy, when my sister receives

Resolved Question:

Wendy, when my sister receives the proceeds from our Mom's house, does that get added onto her husband's income, causing higher taxes for them for 2010? OR, is there a certain amount of time allowed for them to jettison the monies due the other siblings before it counts as increased income to them?


Submitted: 6 years ago.
Category: Tax
Expert:  Wendy Reed replied 6 years ago.

Thank you for giving me the opportunity to assist you. I will give the best answer that I can with the information provided.


Hello Nancy,


Unfortunately, this is all your sister's income (assuming that she is the only owner of the house), and the law does not allow for deductions of gifts to family members. Since California is a community property state, the proceeds will be income on their joint return, or reported 50/50% on separate returns if they file separately.


If I remember correctly, you sister is gifting the proceeds to respective siblings. As such, the siblings (recipients of gifts) will not incur any income taxes on what your sister disburses to them.


Please let me know if you have any additional inquiries.

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