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Lane
Lane, JD, CFP, MBA, CRPS
Category: Tax
Satisfied Customers: 10165
Experience:  Law Degree, specialization in Tax Law and Corporate Law, CFP and MBA, Providing Financial & Tax advice since 1986
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My father sold s stock,knowing he'd owe taxes on any profit.

Customer Question

My father sold his stock,knowing he'd owe taxes on any profit. He signed our home over to me & my son. How, if any, will these actions affect him on his tax return for 2015, as far as him being responsibility for any tax? I hope this makes sense
Submitted: 9 months ago.
Category: Tax
Expert:  Lane replied 9 months ago.

Hi,

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He'll report the gains on form 8949 which will flow to schedule D.

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If he held the stock for more than a year, he'll get the lower long term capital gains treatment.

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Long-term gains and qualified dividends are taxed at...

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  • 0% if taxable income falls in the 10% or 15% marginal tax brackets
  • 15% if taxable income falls in the 25%, 28%, 33%, or 35% marginal tax brackets

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As far as deeding the house to you and your son, that's considered a gift by IRS (as long as it was done with the expectation of nothing in return),and excluded from income tax to you and son by Internal Revenue Code §102.

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And if completely given away (which is what this was), if he ends up owing more money on the gain than he can pay, IRS cannot attach something that is not his for his tax debt.

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Have I understood (and answered) your question?

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Let me know and we can go from here.

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Lane

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I hold a JD (Juris Doctorate, a doctoral degree in the law), with concentration in Tax Law, Estate law & Corporate law, an MBA, with specialization in finance & tax, as well as CFP® and CRPS designations. - I’ve been providing financial, Social Security & Medicare, estate, corporate & tax advice since 1986.

Expert:  Lane replied 8 months ago.

Hi,

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I’m just checking back in to see how things are going.

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Did my answer help?

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Let me know…

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Thanks

Lane

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