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Merlo, Accountant
Category: Tax
Satisfied Customers: 9783
Experience:  25+ years tax consulting. Specializing in returns for US citizens living abroad
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I have a home where the mortgage is in my parents name. The

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I have a home where the mortgage is in my parents' name. The warranty deed is also in their name. I have made all payments to the mortgage company since day 1. I now want to sell the home and buy another. The equity will go to me. They will, however, have to sign the papers. Will they have to pay the capital gain tax or is there a way around this since I actually bought the home and receive the equity.

Hello Customer,


As long as the title to the home is in your parents' names, they are the ones who will have to pay the capital gains tax on the sale of this home, regardless of who actually made the mortgage payments.


Once the home is sold, your parents can gift you the money received from the sale. No gift tax would actually be due on the transaction since they are each allowed to give gifts in their lifetime of up to $1 million before they start paying gift tax. But since the value of the gift will exceed the allowed annual exclusion of $13,000, they would be required to file Form 709 with the IRS to report the value of the gift they are giving to you.


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