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levr, Tax Advisor
Category: Capital Gains and Losses
Satisfied Customers: 29918
Experience:  Working for a large tax preparation service
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There, 7 years ago, my grandfather, my husband and myself

Customer Question

Hi there,
7 years ago, my grandfather, my husband and myself bought a house together in GA. He took the loan in his name, however we are all 3 on the deed as equal part owners. Helives in his own house in CA but my husband and I have lived in the GA house for the duration of our 7 years. We all would like to sell the house and use the equity to buy a new house outright. Are w subject to the capital gains tax or do we qualify for the exemption?
Thabk you for answering our question!
Submitted: 1 year ago.
Category: Capital Gains and Losses
Expert:  levr replied 1 year ago.
As there are three equal co-owners - each co-owner will realize 1/3 of the gain and will be responsible for any taxes on that gain.
Expert:  levr replied 1 year ago.
As you and your husband owned and used the property as a primary residence at least three out of last five years before the sale - each of you qualify for the exclusion - up to $500k assuming you are filing a joint tax return.Your grandfather who did not use the property as his primary residence doesn't qualify for the exclusion and will be taxable on his portion of the gain.The IRS would not allow to transfer the tax liability to another person.Let me know if you need any help with reporting...I appreciate if you take a moment to rate the answer.Experts are ONLY credited when answers are rated positively.If you still have any doubts, need clarification - please be sure to ask.I am here to help you with all tax related issues.