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TAX QUESTION. A GENTLEMAN RECEIVED FROM THE TITLE COMPANY…

TAX QUESTION Lawyer's Assistant:...

TAX QUESTION

Lawyer's Assistant: What state are you in? It matters because laws vary by location.

A GENTLEMAN RECEIVED FROM THE TITLE COMPANY AMOUNT OF PROCEEDS. DOES HE HAVE TO OWN HIS HOME TO GET AN EXEMPTION. THE 250,000 EXEMPTION. HE LIVED IN THE HOME FOR SEVERAL YEARS. IT WAS HIS MOTHER'S HOME. HIS SISTERS HAD TO PAY TAX ON THE 90K HE PAID THEM....CALIFORNIA IS THE STATE

Lawyer's Assistant: Has anything been filed or reported?

ONLY TO THE IRS FOR THE AMOUNT HE RECEIVED. NO BASIS NO EXEMPTION. 1099 S FROM THE TITLE COMPANY FOR PROCEEDS IS ON HIS SOCIAL SECURITY NUMBER A CPA TOLD HIM HOW MUCH TO PAY HIS SISTERS AND HE HAS A K-1 FOR THE OVER 90K BUT HE WANTS AN EXEMPTION.

Lawyer's Assistant: Anything else you want the lawyer to know before I connect you?

CAN HE CLAIM THE EXEMPTION. WHAT DOCS DOES HE HAVE TO HAVE IF AUDITED. PROOF THAT IT WAS HIS HOME? THAT HE LIVED THERE FOR OVER TWO YEARS. I HAVE TAX RETURNS FOR 4 YEARS WITH THAT ADDRESS.

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Answered in 1 minute by:
3/9/2018
Ray
Ray, Lawyer
Category: Legal
Satisfied Customers: 46,321
Experience: 30 years in civil, probate, real estate, elder law
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Hi and welcome to JA. Ray here to help you today.Please bear with me a few moments while I review your question and respond.

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Living there won't qualify here you have to own it.

In general, to qualify for the Section 121 exclusion, you must meet both the ownership test and the use test. You're eligible for the exclusion if you have owned and used your home as your main home for a period aggregating at least two years out of the five years prior to its date of sale. You can meet the ownership and use tests during different 2-year periods. However, you must meet both tests during the 5-year period ending on the date of the sale. Generally, you're not eligible for the exclusion if you excluded the gain from the sale of another home during the two-year period prior to the sale of your home. Refer to Publication 523 for the complete eligibility requirements, limitations on the exclusion amount, and exceptions to the two-year rule.

If you had opened probate and sold house from probate and filed last return for mother she could have claimed the exemption.Unfortunately if you had the title in your name you could claim exemption.Otherwise there is going to be taxes due here.

Please don't shoot the messenger.The deduction is only for a home you owed in your name, living there doesn't exempt.Again I wish I could tell you otherwise.

I appreciate the chance to help you today.Thanks

If you can positive rate 5 stars it is much appreciated.

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If he got reported for the whole amount the siblings should offer to contribute to the tax bill here if they had shares.

Ray
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Experience: 30 years in civil, probate, real estate, elder law
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