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Wallstreet Esq.
Wallstreet Esq., Tax Attorney
Category: Tax
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Experience:  10 years experience
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Have sale of residence owned by 2 related parties. Mother

Customer Question

Have sale of residence owned by 2 related parties. Mother and adult son. Son has lived there over 5 years. Mother never occupied property. Gain on sale exceeds his exclusion by about $100K. In reporting on form 593, do I use two forms, one for each party, and allocate the gain in relation to their ownership percentage?
JA: The Accountant will know how to help. Is there anything else important you think the Accountant should know?
Customer: mother is retired in late 80's, living on SS income mostly.
Submitted: 16 days ago.
Category: Tax
Expert:  emc011075 replied 16 days ago.

Hi. My mane is Eva and I will be happy to help you.

If two parties (other than husband and wife filing a joint return) are selling one property, each party is selling its own portion. If the mother owns 30% and the son owns 70%, the mother will claim 30% of the sales proceeds and 30% of her basis and her own exclusion if qualified. The same rule will apply to the son's portion.

You will have to complete two separate certificates for each party.