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Stephen G.
Stephen G., Financial Advisor
Category: Capital Gains and Losses
Satisfied Customers: 7194
Experience:  Senior Tax Expert; CPA/PFS(retired)Personal Financial Planner; Small Business & Professional Mergers & Acquisitions
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My parents purchased a 3 family house on "L" St in South Boston

Customer Question

My parents purchased a 3 family house on "L" St in South Boston in the early 1950's for $20,000. My mother signed it over to my sister by a Quitclaim deed in 1984. My mother died in in 1998. My brother lived in the house until Dec 2014. My sister lived in the house until Feb 2016 when she had a stroke. She is now in assisted living. My sister has an irrevocable trust (signed more than 5 years ago) which names me as trustee.
I am the youngest sibling and my name was put on the deed in 1999. I have not lived in the house since I was 16. I am 69years old now.
I am cleaning out the house and preparing to sell. How do I determine how much capital gains tax I will pay? The lawyer who reviewed the trust says that I own the house 100%.
Submitted: 1 year ago.
Category: Capital Gains and Losses
Expert:  Stephen G. replied 1 year ago.
Well, are you saying the trust does not own the home?Do you own the home or do you own it as the beneficiary of the trust?How was the home transferred from your sister individually to whom.If you own the home individually, the actual capital gains tax you owe will be based upon the amount of your other income.At this point I would plan on between 20% - 25%, because you also have MA Capital gains tax to consider.
Customer: replied 1 year ago.
I was named as beneficiary in my sister's trust. I am healthcare proxy and have power of attorney for my sister.
I have been paying all the bills for cleaning out the house with her money. I am expected to continue paying for her assisted living with the money from the sale of the house and to put some of the money in the trust so that Medicaid does not have access to it if she ends up in a nursing home.
Trying to keep her money separate from our (husband and myself) money. My husband and I are both retired, so our income is about 50% less than it was last year (2015). I retired Dec 31,2015.
Expert:  Stephen G. replied 1 year ago.
The question is, who owns the home? You individually or is the title in the trust?Also, how was the title transferred our of your sister's name, and where was it transferred to?You are the Trustee of her Irrevocable Trust, as well as the beneficiary? Is anyone else involved? What if anything is your sister's interest in the Trust?When you say your name was "put on the deed" in 1999, do you mean you were added to the deed as an owner, or that the home was transferred to you by your sister? Or did she just add you to the deed.I'm asking these questions so that I can advise you with respect to how the sale will be handled & how it will be taxed. I know your attorney told you that you own the house 100%, but the question is whether that is through the provisions of the Trust or not. You said the lawyer told you that after reviewing the trust, so that tells me that the Trust may actually own the home, and you own the home because you are the sole beneficiary of the Trust.