How JustAnswer Works:
  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site. Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.
Ask Lane Your Own Question
Category: Tax
Satisfied Customers: 12705
Experience:  Law Degree, specialization in Tax Law and Corporate Law, CFP and MBA, Providing Financial & Tax advice since 1986
Type Your Tax Question Here...
Lane is online now
A new question is answered every 9 seconds

I haven't filed my tax return until I can find out about capital

Customer Question

I haven't filed my tax return until I can find out about capital gains and gift of equity. I gave my son $33.800 in equity to help lower the price when he purchase my home in Prescott. The house was appraised for $185,000 he bought it for 169,000 but it ended up with him owing $35,000, I received $43,000 and gave him 6,000 to do repairs on the house,ie. roof, etc.I ended up with $37,800 so that is my problem how do I put it on my taxes I'm75 so my income is less than $,5000 so I usually don't pay any taxes
JA: Thanks. Can you give me any more details about your issue?
Customer: Did you read what I wrote? I don't know how else to put it. What can I expect to pay in taxes?
JA: OK got it. Last thing — Tax Professionals generally expect a deposit of about $32 to help with your type of question (you only pay if satisfied). Now I'm going to take you to a page to place a secure deposit with JustAnswer. Don't worry, this chat is saved. After that, we will finish helping you.
Submitted: 1 year ago.
Category: Tax
Expert:  Lane replied 1 year ago.
Hi,...Looks like no one else is picking this up. I'll help you here....Your capital gain would normally be sales price minus basis ... and basis is your purchase price, PLUS improvements. (Amounts of cash actually received because some of the proceeds you may have borrowed to initially purchase or refinance the house had to be re-paid is irrelevant to capital gain)....Again, the most basic formula for gain is sales price minus your purchase price....But there are a couple of other factors here (1) the gift of equity, and (2) whether this was your primary residence when you sold it....The gift of equity DOES reduce the capital gain, because you gave away that much (that portion) of the house, (you didn't sell that portion). ... So the modified formula would be (sales price, minus purchase price, minus gift of equity, equals capital gain)...BUT NONE of that matters if this was your primary residence (IRS test for that is having lived in the house for any 24 months out of the 5 years before the sale) ... Because if so, then $250,000 of gain ($500,000 for those married filing jointly) is completely excluded from taxes anyway....Please let me know what questions you have from here..Lane....I hold a law degree (JD, Juris Doctorate), with concentration in Tax Law, Estate law & Corporate law, an MBA, with specialization in finance & tax, as well as CFP® and CRPS designations. - I’ve been providing financial, Social Security/Medicare, estate, corporate & tax advice since 1986.
Customer: replied 1 year ago.
No not quite,I guess I'll take it to a CPA, I usually do my taxes on Turbo Tax, I don't have all the information available as yet to do my taxes haven't received some information. I did request an extension... I'm pretty good at figuring things out, this however confused me so I need to take my time. Thank you for your help but it didn't clarify what I needed to know.
Customer: replied 1 year ago.
When I get my stuff together I'll ask again then I can do it right. Thanks I just need to get my ducks in order.
Expert:  Lane replied 1 year ago.
Was this you home?...And did you live in for for years?...If so there IS no gain and IS NO tax.
Expert:  Lane replied 1 year ago.
If there is a reportable gain (because this WASN'T your primary residence) then it's sales price, minus gifted amount, minus your purchase price....I'd appreciate a positive rating (using the faces or stars on your screen, and then clicking “submit”) I will not be credited for the work here, until you have rated me positively....Thank you!Lane…