Capital Gains and Losses

Capital Gains Tax Questions? Ask a Tax Advisor for Answers ASAP

Ask an Expert,
Get an Answer ASAP!

This answer was rated:

I have a bit of complex real estate transaction going on at…

I have a bit of...
I have a bit of complex real estate transaction going on at the moment. I'm buying a home from my parents that my mother inherited from her aunt. The house was appraised at 255K but they are going to sell it to me for 200K and allow me to use the 55K in equity as a down payment for a mortgage. The mortgage company is telling me that in order for the gift of equity to work and for my parents to net 200K for the house the purchase price will need to be 255K. My parent's concern here is how this will affect the capital gain tax if they technically sold the house for 255K but only recevied 200K for it. Any advice would be helpful. Thank you!
Show More
Show Less
Ask Your Own Capital Gains and Losses Question
Answered in 1 minute by:
3/7/2018
Lane
Lane, JD, CFP, MBA, CRPS
Category: Capital Gains and Losses
Satisfied Customers: 14,614
Experience: Have been providing Financial and Tax advice for 30 years.Concentration in Corporations, Estate, Income Tax and Business Planning
Verified

Hi. My name’s Lane …

I hold a law degree (J.D.), with concentration in Tax Law, Estate law & Corporate law, an MBA in finance, a BBA, and CFP & CRPS (Chartered Retirement Plans Specialist) designations, as well - I’ve been providing financial, Social Security/Medicare, estate, corporate, non-profit, and tax advice, to clients on three continents, since 1986.

I’m reading your question now.

Bear with me a moment while I type up my response.

….

Then if you have further questions we can go from there.

Ask Your Own Capital Gains and Losses Question

No, the amount of the gift is subtracted for the gain, becasue gifts are specifically excluded from income tax under IRC §102.

...

When they report the sale, however, they should enter the sales price as it will appear on the 1099-S, or you will receive a notice from the IRS.

...

To offset that, you can either enter a higher cost basis (additional 55K) or add it to selling expenses.

Ask Your Own Capital Gains and Losses Question
Customer reply replied 4 months ago
Ok great, that is very helpful and it should help them feel more comfortable about the sale. Thank you!

You're very welcome ... Your positive rating … (by using those the stars or faces on your screen, and then clicking “submit”) …is thanks enough!

That's the only way I'll be compensated by JustAnswer for the work here

...

Thank you,

Lane

Lane
Lane, JD, CFP, MBA, CRPS
Category: Capital Gains and Losses
Satisfied Customers: 14,614
Experience: Have been providing Financial and Tax advice for 30 years.Concentration in Corporations, Estate, Income Tax and Business Planning
Verified
Lane and 87 other Capital Gains and Losses Specialists are ready to help you
Ask your own question now

Thanks much ... here's the tax law reference for you: https://www.law.cornell.edu/uscode/text/26/102

Ask Your Own Capital Gains and Losses Question
Customer reply replied 4 months ago
Excellent, thank you.

You're very welcome

Ask Your Own Capital Gains and Losses Question
Was this answer helpful?

How JustAnswer works

step-image
Describe your issueThe assistant will guide you
step-image
Chat 1:1 with a tax expertLicensed Experts are available 24/7
step-image
100% satisfaction guaranteeGet all the answers you need
Ask Lane Your Own Question
Lane
Lane
Lane, JD, CFP, MBA, CRPS
Category: Capital Gains and Losses
Satisfied Customers: 14,614
14,614 Satisfied Customers
Experience: Have been providing Financial and Tax advice for 30 years.Concentration in Corporations, Estate, Income Tax and Business Planning

Lane is online now

A new question is answered every 9 seconds

How JustAnswer works:

  • Ask an ExpertExperts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional AnswerVia email, text message, or notification as you wait on our site. Ask follow up questions if you need to.
  • 100% Satisfaction GuaranteeRate the answer you receive.

JustAnswer in the News:

Ask-a-doc Web sites: If you've got a quick question, you can try to get an answer from sites that say they have various specialists on hand to give quick answers... Justanswer.com.
JustAnswer.com...has seen a spike since October in legal questions from readers about layoffs, unemployment and severance.
Web sites like justanswer.com/legal
...leave nothing to chance.
Traffic on JustAnswer rose 14 percent...and had nearly 400,000 page views in 30 days...inquiries related to stress, high blood pressure, drinking and heart pain jumped 33 percent.
Tory Johnson, GMA Workplace Contributor, discusses work-from-home jobs, such as JustAnswer in which verified Experts answer people’s questions.
I will tell you that...the things you have to go through to be an Expert are quite rigorous.

What Customers are Saying:

I really was impressed with the prompt response. Your expert was not only a tax expert, but a people expert!!! Her genuine and caring attitude came across in her response...

T.G.WMatteson, IL

I WON!!! I just wanted you to know that your original answer gave me the courage and confidence to go into yesterday's audit ready to fight.

BonnieChesnee, SC

Great service. Answered my complex tax question in detail and provided a lot of additional useful information for my specific situation.

JohnMinneapolis, MN

Excellent information, very quick reply. The experts really take the time to address your questions, it is well worth the fee, for the peace of mind they can provide you with.

OrvilleHesperia, California

Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help.

Mary C.Freshfield, Liverpool, UK

This expert is wonderful. They truly know what they are talking about, and they actually care about you. They really helped put my nerves at ease. Thank you so much!!!!

AlexLos Angeles, CA

Thank you for all your help. It is nice to know that this service is here for people like myself, who need answers fast and are not sure who to consult.

GPHesperia, CA

< Previous | Next >

Meet the Experts:

R. Klein, EA

R. Klein, EA

Enrolled Agent

263 satisfied customers

Over 20 Years experience in resolving tough tax cases

jgordosea

jgordosea

Enrolled Agent

173 satisfied customers

As an Enrolled Agent you can be ensured of my competence in income tax matters.

PhillipB EA

PhillipB EA

Accountant

130 satisfied customers

Enrolled Agent with 8 years experience in tax return preparation, representation, and taxpayer consultation

Arthur Rubin

Arthur Rubin

Tax Preparer

77 satisfied customers

Over 22 years of tax preparation experience.

Bill-the-CPA

Bill-the-CPA

Certified Public Accountant (CPA)

55 satisfied customers

Seasoned professional with over 15 years in public accounting. Income, sales and property tax. Also accounting/tax software.

FredStevens

FredStevens

Accountant

37 satisfied customers

Experienced in business, accounting and tax planning for individuals, small/medium sized businesses and non-profit organizations

Shane-CPA

Shane-CPA

CPA, PFS, CGMA

11 satisfied customers

Shane Northrop is a Certified Public Accountant, Personal Financial Specialist and a Chartered Global Management Accountant

< Previous | Next >

Related Capital Gains and Losses Questions
My parents (80 and 84) inherited a home when my sister died
Hi Pearl, my parents (80 and 84) inherited a home when my sister died in February. They sold the home and are wanting to save enough to pay for the taxes from the proceeds. How much will they have to … read more
Chad EA, CDFA®, CFP®
Chad EA, CDFA®, CFP®
IRS Enrolled Agent, CFP(R),
Master\u0027s Degree
2,457 satisfied customers
I have a real estate property that I'm looking to use to
i have a real estate property that I'm looking to use to form a lcc with my mother (currently a rental property, she intends to live there and pay off the remaining mortgage of $140k, house appraised … read more
emc011075
emc011075
Senior Tax Specialist
Bachelor's Degree
16 satisfied customers
I have a house that I own (loan is in my name) but my son
I have a house that I own (loan is in my name) but my son and his wife have been living there since I took the loan out. They have made all mortgage payments and yearly tax payments and lived there fo… read more
LEV
LEV
Retired
Bachelor's Degree
14,896 satisfied customers
My son purchased a home for $265,000 for my wife and me, as
My son purchased a home for $265,000 for my wife and me, as we were unable to get a loan following a short sale. We put up the down payment and made the monthly mortgage payments. After 3 years we wer… read more
LEV
LEV
Retired
Bachelor's Degree
14,896 satisfied customers
House was gifted to my aunt more then 20 years ago from her
House was gifted to my aunt more then 20 years ago from her mother. She has lived in it as her primary residence since. Her husband passed away 3 years ago. Is her exemption only good for 250k, plus h… read more
Lane
Lane
JD, CFP, MBA, CRPS
14,614 satisfied customers
Does a married couple get a one time exemption for capital
does a married couple get a one time exemption for capital gains for investment property. Can they deduct off the gain any money spent on the rental over the period of them owing it? We were told we g… read more
Lane
Lane
JD, CFP, MBA, CRPS
14,614 satisfied customers
I purchased an investment property about eight years ago.My
I purchased an investment property about eight years ago.My basis is about 72k. My sister has lived in the home the entire time. I receive Mo rent, she pays the monthly mortgage which includes propert… read more
Dr. Fiona Chen
Dr. Fiona Chen
President
Ph.D.
1,129 satisfied customers
Both my parents passed away last fall. They lived in house
Both my parents passed away last fall. They lived in house in Massachusetts which they bought for 135K back in 2000. At the time because of their credit issues my sister had to put the house in her na… read more
keeperumiami
keeperumiami
Sr Financial & Tax Consultant
Bachelor\u0027s Degree
1 satisfied customers
I asked a question previous and Michael Lyyken answered. It
I asked a question previous and Michael Lyyken answered. It was about selling our home and capital gains. He said that me and my wife get an exemption up to $500K for selling our home and not having t… read more
TaxAttorneytoHelp
TaxAttorneytoHelp
Owner
Doctoral Degree
2,542 satisfied customers
I purchased my home in 1993 for $150,000. I am in contract
Good morning , I purchased my home in 1993 for $150,000. I am in contract to sell my home to my brother for $600,000. My home was appraised for $765,000. I am giving him a gift of equity for $165,000 … read more
TaxRobin
TaxRobin
Vocational, Technical or Trade School
1 satisfied customers
We are looking into possibility of buying a house in
We are looking into possibility of buying a house in Ireland. My girlfriend has savings 100k and I have 75k. Her parents will also gift 190k directly to her which she will also put towards to deposit.… read more
PDtax
PDtax
Owner
Master\u0027s Degree
1 satisfied customers
A woman is giving her nephew a gift of equity in an
A woman is giving her nephew a gift of equity in an investment property he's going to buy from her. FMV is $1 million. Gift of equity is $300K. Is the aunt liable for capital gains on the $300K she is… read more
Lane
Lane
JD, CFP, MBA, CRPS
14,614 satisfied customers
I bought my mother's home when she passed (bought out 3 brothers),
I bought my mother's home when she passed (bought out 3 brothers), and my sister lived there for four years. It is not my primary residence but I was only one on deed. I am selling it now, and will ma… read more
keeperumiami
keeperumiami
Sr Financial & Tax Consultant
Bachelor\u0027s Degree
1 satisfied customers
My mother (US Citizen) and mother-in-law (Canadian) want to
My mother (US Citizen) and mother-in-law (Canadian) want to distribute their assets before their death. They want to buy a house for our child, that we can live in (for a reduced rent). What is the be… read more
R. Klein, EA
R. Klein, EA
Enrolled Agent
Master's Degree
263 satisfied customers
I am going to sell my primary residence, and I believe I
I am going to sell my primary residence, and I believe I will have about $225 equity when I sell. I have lived in this property for four years. If I use that money as a downpayment on a new primary re… read more
keeperumiami
keeperumiami
Sr Financial & Tax Consultant
Bachelor\u0027s Degree
1 satisfied customers
I moved from Indiana to Nevada in May 2014 transferring
Hi I moved from Indiana to Nevada in May 2014 transferring my USPS job. I sold my primary residence in Sept for 135000. After paying the mortgage and fees... I realized about 60,000 dollars.I used it … read more
keeperumiami
keeperumiami
Sr Financial & Tax Consultant
Bachelor\u0027s Degree
1 satisfied customers
I have a question relating to real property in California I
I have a question relating to real property in California I need some help with. Father and son intend to transfer their respective properties (primary residences, NOT investment properties) to each o… read more
jgordosea
jgordosea
Enrolled Agent
Bachelor's Degree
173 satisfied customers
My mum owns a property which was passed on from my father when
My mum owns a property which was passed on from my father when he died over 20 years ago,which we live in. The property was cash until 3 years ago when me and my mum borrowed £100000 for renovations. … read more
SoftwareVince
SoftwareVince
Senior Accountant
Master's Degree
25 satisfied customers
Disclaimer: Information in questions, answers, and other posts on this site ("Posts") comes from individual users, not JustAnswer; JustAnswer is not responsible for Posts. Posts are for general information, are not intended to substitute for informed professional advice (medical, legal, veterinary, financial, etc.), or to establish a professional-client relationship. The site and services are provided "as is" with no warranty or representations by JustAnswer regarding the qualifications of Experts. To see what credentials have been verified by a third-party service, please click on the "Verified" symbol in some Experts' profiles. JustAnswer is not intended or designed for EMERGENCY questions which should be directed immediately by telephone or in-person to qualified professionals.

Disclaimer: Information in questions, answers, and other posts on this site ("Posts") comes from individual users, not JustAnswer; JustAnswer is not responsible for Posts. Posts are for general information, are not intended to substitute for informed professional advice (medical, legal, veterinary, financial, etc.), or to establish a professional-client relationship. The site and services are provided "as is" with no warranty or representations by JustAnswer regarding the qualifications of Experts. To see what credentials have been verified by a third-party service, please click on the "Verified" symbol in some Experts' profiles. JustAnswer is not intended or designed for EMERGENCY questions which should be directed immediately by telephone or in-person to qualified professionals.

Show MoreShow Less

Ask Your Question

x