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Dan, Retired JD
Category: Legal
Satisfied Customers: 1164
Experience:  Retired attorney, general practice, with an additional background in financial planning,
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My husband has two houses one of which he has a ...

Customer Question

My husband has two houses one of which he has a mortgage the other he owns with his mother and father. The house he owns with his mother and father is the house he lives in and wishes to quick deed to himself and I. But his mother says that she would have to pay capital gain ?
Submitted: 9 years ago.
Category: Legal
Expert:  Dan replied 9 years ago.


You only have to pay capital gains when you sell property. If you gift property you gift it at your basis (think "at your cost" - that's not quite right but close enough for this discussion), so the recipient received the property at that basis (called a carry-over basis sometimes), which is more the recipients problem than the donors.

The long and short is that when you gift away appreciated property you (the giver) do not realize a gain (you do not have to report a capital gain on your income taxes). If the recipient later sells the appreciated property and the sale isn't exempt (as the sale of a residence often is), then they are the ones who realize that gain.

If your husband's folks are otherwise in favor of the idea of gifting their interest in that property to the two of you, the capital gains issue should not stand in the way.

By the way, you should have an attorney do the deed for you - it won't cost that much for something this simple - and it insures that everything goes OK and buys you a lot of protection. Most likely the deed should read from the three of them (mom, dad and husband) to the two of you as husband and wife (or however they title real estate for a married couple in Florida).

I hope this has been helpful. Let me know if you have any followup questions. If none, please remember to click on the ACCEPT link so that I may receive credit for working on this topic with you. (I'd greatly appreciate it!)

Thank you,



The information provided is general in nature only and should not be construed as legal advice or to create an attorney-client relationship. You should always consult with a lawyer in your state.

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