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My mother became the owner of a home in after my stepfather…

My mother became the...

My mother became the owner of a home in virginia after my stepfather passed away. She then added my name to the home so that if something was to happen to her then I would be the owner. My mother sold the home and on paper it looks as if we split the money in half. All of the money was given to my mother. But now I have a tax form and not sure what to do with it. I did not benefit from the sale but it looks as if I did. How can this be fixed for tax purposes

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3/23/2018
Lane
Lane, JD, CFP, MBA, CRPS
Category: Tax
Satisfied Customers: 14,672
Experience: Law Degree, specialization in Tax Law and Corporate Law, CFP and MBA, Providing Financial & Tax advice since 1986
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Hi. …. My name’s Lane,

I hold a law degree (J.D.), with concentration in Tax Law, Estate law & Corporate law, an MBA in finance, a BBA, and CFP & CRPS (Chartered Retirement Plans Specialist) designations, as well - I’ve been providing financial, Social Security/Medicare, estate, corporate, non-profit, and tax advice, to clients on three continents, since 1986.

I’m reading your question now.

Bear with me a moment while I type up my response.

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Then if you have further questions we can go from there.

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I'm So sorry, but when your mother "added your name to the deed," she gifted you 1/2 of the property.

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Taxation follows owership

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IRS will get a copy of that 1099-S as well.

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You are (1) entitled to 1/2 of the proceeds from the sale and (2) responsible for your portion of that gain.

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The right thing for your mother to do here is give you enough money from the proceeds so that you can pay the tax.

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But again, IRS WILL expect you to report based on their getting their copy of the 1099-S.

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As a matter of fact, your mother will likely have NO gain if this qualified as her principal residence.

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Let me know what questions you have from here. I'll be here,

Lane

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Customer reply replied 4 months ago
ok thank you for the info so far. Just a few follow ups... this was not her primary residence. I lived in the home for about 3 years when I moved back in the area. Once I was diagnosed with a rare autoimmune disease I left that home to move in with her (month of may 2017) so that she could take care of me and my son. The reason I do not want any of the funds bc I was just approved for disability. I do not want this income to mess up that. I do not want the disability people to think I was lying to them about income bc i wasnt

Ok there are two types of Disability; SSDI and Supplemental Security income.

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The main difference between Social Security Disability (SSDI) and Supplemental Security Income (SSI) is the fact that SSDI is available to workers who have accumulated a sufficient number of work credits, while SSI disability benefits are available to low-income individuals who have either never worked or who haven't earned enough work credits to qualify for SSDI.

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If it's SSDI you're talking about, only EARNED income can affect your eligibility. Gains from the sale of a house, interest, dividends, rents from property, etc., etc., are irrelevant.

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Only EARNED income (wages or owning a business - self employment income) can affect SSDI

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I tried to accept your call but there was an error of some sort on my end

Lane
Lane, JD, CFP, MBA, CRPS
Category: Tax
Satisfied Customers: 14,672
Experience: Law Degree, specialization in Tax Law and Corporate Law, CFP and MBA, Providing Financial & Tax advice since 1986
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Lane
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