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I took out a HE loan on my property to purchase a condo for

I took out a HE...
I took out a HE loan on my property to purchase a condo for my sister. she provided the downpayment. I want to transfer the property to her and me so she can refinance to pay me out. what are the tax implications?
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Answered in 13 minutes by:
10/23/2013
Megan C
Megan C, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 16,581
Experience: Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level
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Megan C :

Hello! I am a CPA here to assist you with your tax questions. My goal is to provide you with excellent service today.

Megan C :

How are you today?

Megan C :

There will be no tax implication when you transfer the property to you and your sister. The portion that you give to your sister would be a "gift" - if the interest in the property that you are transferring to your sister is greater than $14,000 you would file a gift tax return, although no tax would actually be due since you have not given away more than $5.2 million during your life

Megan C :

Then, when she buys you out you only have a taxable transaction if she pays you more than what you have invested in the property.

Megan C :

If she simply pays you what you have invested in the property, it's return of basis and there is no capital gain

Megan C :

Did you have any further questions about this transaction?

Megan C :

I see you have joined the chat...are you able to see my response?

Customer:

yes, thank you.

Megan C
Megan C, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 16,581
Experience: Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level
Verified
Megan C and 87 other Tax Specialists are ready to help you
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Thanks, Laura for your positive rating. Please come back and visit me for any of your tax, finance, or social security needs. It was a pleasure working with you today.
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Customer reply replied 4 years ago


I did view your response and sent in a rating.

Thanks, Laura. Have a great day!
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Megan C
Megan C
Megan C, Certified Public Accountant (CPA)
Category: Tax
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