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Marvin,EA, Enrolled Agent
Category: Tax
Satisfied Customers: 1672
Experience:  Enrolled to Represent Taxpayers Before The IRS
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Good day! My parents own several homes and I currently ...

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Good day! My parents own several homes and I currently reside and pay rent in one of them. They are in their 60''s and looking to retire. We are discussing if it is feasible to give me outright the house I am renting or purchase it for a significantly reduced price. There is probably 100K in equity in the home. So assuming the parents can give $24K away, $12K apiece, who would be responsible for the for the tax of the remaining $76K?


Thank for using Just Answer. Have your parents ever rented out the home you reside in now? Do you know if they ever depreciated the rented home?
Customer: replied 9 years ago.
Reply to Marvin,EA's Post: Yes, it was rental property before me and I do not know if it was ever depreciated.
One way to find out is your parents tax return. If it property was ever depreciated, your parents would have to recapture the amount they depreciated. As long as the amount depreciated is less than the selling price there is no problems. Example- The house cost $50,000 and was depreciation over the year was $30,000. The base in the house is now $20,000. If the house was sold for $50,000 a profit of $30,000 would have be made on the sale of the house and that amount is taxable. So it all depend on if the home was ever depreciated.
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