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Tax question, sell of home.

Old 12-01-2015, 04:46 PM
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Default Tax question, sell of home.

Figured this might be a good place to ask and get opinions before I move forward.


I currently own/finance my own home which I've been in for 8 years. My mother passed away two years ago and I also own her home. I was an only child so nothing legal took place. The property deed had been transferred into my name long before her death and the house was in her, and my grandparents name and I am having transferred to my name.

I want to sell the home and put any gains from it into a refinance of my primary residence. Will I get stuck with capital gains ? It's been two years, I don't have really any will or estate to show like an inheritance. State is South Carolina

Give me your thoughts. Thanks
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Old 12-01-2015, 04:48 PM
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Old 12-01-2015, 04:54 PM
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Originally Posted by Goofballdev View Post
Figured this might be a good place to ask and get opinions before I move forward.


I currently own/finance my own home which I've been in for 8 years. My mother passed away two years ago and I also own her home. I was an only child so nothing legal took place. The property deed had been transferred into my name long before her death and the house was in her, and my grandparents name and I am having transferred to my name.

I want to sell the home and put any gains from it into a refinance of my primary residence. Will I get stuck with capital gains ? It's been two years, I don't have really any will or estate to show like an inheritance. State is South Carolina

Give me your thoughts. Thanks
If the house was previously owned by your mother and grandparents, and it was gifted to you prior to her passing, your cost basis is what the house cost them plus improvements. Because the home wasn't your personal residence, I don't believe you can exclude the gain.

There could be complications from when your grandparents added your mom to the deed also.
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Old 12-01-2015, 04:57 PM
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Sprockets is correct
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Old 12-01-2015, 04:58 PM
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Originally Posted by Sprockets View Post
If the house was previously owned by your mother and grandparents, and it was gifted to you prior to her passing, your cost basis is what the house cost them plus improvements. Because the home wasn't your personal residence, I don't believe you can exclude the gain.

There could be complications from when your grandparents added your mom to the deed also.
Can the cost basis be what the house was worth at the time they transferred the deed to him, rather than what his parents paid? This was a gray area when my sister & I did the same thing w/our parents' house after they passed. Also, is the one-time capital gains exemption gone or could he use it when he sells?
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Old 12-01-2015, 04:59 PM
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Talk to a real estate attorney
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Old 12-01-2015, 05:13 PM
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Gifted property is different than inherited property. Inherited property has a step up in basis
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Old 12-01-2015, 05:26 PM
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So more details. The home in this instance is a double wide. It was financed in mothers, and both grandparents names. Mother passed before the loan was paid off. Soon after death the loan was paid off. Deed was sent in all three names. I have the paper work to transfer into my name.

Land is deeded separate and was transferred into my name prior to death. No monies changed hands.
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Old 12-01-2015, 05:33 PM
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Originally Posted by Cobia 217 View Post
Can the cost basis be what the house was worth at the time they transferred the deed to him, rather than what his parents paid? This was a gray area when my sister & I did the same thing w/our parents' house after they passed. Also, is the one-time capital gains exemption gone or could he use it when he sells?
Because it was transferred during their lifetime, it is considered a gift. Gifts are generally valued based on the transferor's cost. The only way to get a step-up is if the property transfers upon death. He can't use the exclusion because it is not his primary residence. If the gain is material enough, he could move into it for 2 years to convert it to his primary residence.
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Old 12-01-2015, 05:36 PM
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Originally Posted by Goofballdev View Post
So more details. The home in this instance is a double wide. It was financed in mothers, and both grandparents names. Mother passed before the loan was paid off. Soon after death the loan was paid off. Deed was sent in all three names. I have the paper work to transfer into my name.

Land is deeded separate and was transferred into my name prior to death. No monies changed hands.
The loan has no bearing on the tax consequences. If the trailer was in all three names, you may have a real mess transferring it. On the bright side, there may be a step up on the trailer value. Your cost basis in the land is the cost of the person who gifted it to you.
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Old 12-01-2015, 05:47 PM
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So you say my taxable value on the land would be what they paid for it say 20 years ago?
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Old 12-01-2015, 05:49 PM
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On the home the county tax office said as long as my grandparents signed it over and I had a death certificate there should be no problem transferring into my name.
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Old 12-01-2015, 05:58 PM
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Originally Posted by Goofballdev View Post
So you say my taxable value on the land would be what they paid for it say 20 years ago?
Correct. You can add any capital improvements made since then. Is it possible that your mother inherited it? If so, her cost would be the value on the date your last grandparent passed away.

Originally Posted by Goofballdev View Post
On the home the county tax office said as long as my grandparents signed it over and I had a death certificate there should be no problem transferring into my name.
Hopefully you have that documentation. I've seen where it can be difficult to find the documents.
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Old 12-01-2015, 06:04 PM
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The trailer may not be REAL property,,,, in fl. only the land counts. the trailer is no different than a car .
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Old 12-01-2015, 06:27 PM
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Originally Posted by Sprockets View Post
Correct. You can add any capital improvements made since then. Is it possible that your mother inherited it? If so, her cost would be the value on the date your last grandparent passed away.

My grandparents are both still living so I have signatures.

Hopefully you have that documentation. I've seen where it can be difficult to find the documents.
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Old 12-01-2015, 08:29 PM
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Gifted property in anticipation of a death could be an inheritance. But either way the tax year this occurred did you show the transfer? Have you lived in the house?

You really need a trust attorney in your state.
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Old 12-02-2015, 06:16 AM
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Old 12-02-2015, 07:11 AM
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Originally Posted by Jetsully View Post
Sprockets is correct
Yup. The house has to be your primary residence to take advantage of the cap gain exclusion.
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Old 12-02-2015, 07:43 AM
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Originally Posted by Schmaltz~Herring View Post
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Agree but would use a trust attorney to properly do the title transfer.
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Old 12-02-2015, 06:38 PM
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So you say my taxable value on the land would be what they paid for it say 20 years ago?

The tax 'basis' is what they paid for it 20 years ago (plus improvements since). Should the owner die, the new basis is stepped up to what it's worth on day of death. Should you sell it, every dollar over the 'basis' is a capital gain ...
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