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My mom wants to give me her house. She paid 260,000 for it.

Customer Question
My mom wants to...

My mom wants to give me her house. She paid 260,000 for it. It is now worth about 400,000. I am trying to find out how the taxes would be figured if we sold the house.

Accountant's Assistant: When was the property or asset sold?

It hasn't been sold yet

Accountant's Assistant: Anything else you want the Accountant to know before I connect you?

No, that's pretty much it

Submitted: 1 month ago.Category: Tax
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Answered in 20 minutes by:
6/25/2018
Tax Professional: Lev, Tax Advisor replied 1 month ago
Lev
Lev, Tax Advisor
Category: Tax
Satisfied Customers: 33,311
Experience: Taxes, Immigration, Labor Relations
Verified

If your mother is using the property as her primary residence and if you plan to sell the property anyway - it might be better to sell the property and give you the money.

The gain is expected to be

400,000 (expected sale price) MINUS 260,000 (adjusted basis) = 140,000 << estimated gain.

In this case - the gain may be excluded from taxable income (up to $250,000 for a single person)

.

If the property will be gifted to you - your mother will be required to file a gift tax return (form 709) because the value of the gift is above annual limit - in 2018 - $15,000.

However - there will not be any gift tax as long as total lifetime limit $11,200,000 woudl not be reached.

For you - gift will not be taxable,

but if you sell the property - you will be responsible for taxes on that gain.

You will not be able to exclude the gain.

Your tax liability will depend on your other income, filing status, etc. - I will help with estimations if needed.

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Tax Professional: Lev, Tax Advisor replied 1 month ago

If you still have any doubts, need clarification - please be sure to ask.

I am here to help you with all Social Security / Tax related issues.

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