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Wallstreet Esq.
Wallstreet Esq., Tax Attorney
Category: Tax
Satisfied Customers: 586
Experience:  10 years experience
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I sold my house to my daughter dollar. I pay all the taxes

Customer Question

I sold my house to my daughter for a dollar. I pay all the taxes and water bill.She receives a section 8 check for a rental so she gets a check for 900.00. She cashes the check and gives it to me every month. She now has to claim the checks on her taxes, How do I figure out how much to give her for for her claiming the 900.00.
Submitted: 1 year ago.
Category: Tax
Expert:  emc011075 replied 1 year ago.

Hi. My name is ***** ***** I will be happy to help you.

It depends on your daughter's total income. From what you described, your daughter will most likely have no taxable liability or very little one so the she will not be in higher than 10% tax bracket. The taxes on $900 would be $90.

Customer: replied 1 year ago.
am I figuring this right I would have to give her 12 times the amount of the 900 for the year
Customer: replied 1 year ago.
Expert:  emc011075 replied 1 year ago.

Yes, I am here. Give me a second.

Expert:  emc011075 replied 1 year ago.

90x12 = 1080. That would be tax amount on 10800 income (900x12), assuming the entire amount would be taxable in 10% tax bracket. What is her total income and what's her filing status?

Customer: replied 1 year ago.
She makes about 70,000 a year and is single
Customer: replied 1 year ago.
are u still there
Expert:  emc011075 replied 1 year ago.

Yes, I am still here. You have to be little more patient. I helping somebody else as well.

Customer: replied 1 year ago.
Im sorry
Expert:  emc011075 replied 1 year ago.

The more she makes, the more expensive it becomes for her to claim the additional rental income.

Expert:  emc011075 replied 1 year ago.

Sorry, I accidentally deleted what I wrote before. So here's it again.

With 70K income she is in 25% tax bracket which means, the additional 10800 in rental income is costing her $2,700 in taxes. Since this is a rental income, she can reduce it by certain deductions, like property tax or insurance. Assuming 25% in deductions, you will owe her about $2000 for the additional income claimed on her tax return.