- My wife's parents purchased a house for her when she turned 20 years old. She lived there, but the house was under her mother's name.
- My wife and I met and got married and lived in the house together since 2016. We were always responsible for paying property taxes, utilities, and improvements.
- In 2017 we took out a HELOC loan against the house (with the house/property as collateral), built an addition and renovated the interior. We paid the loan, and my wife's mother cosigned the bank documents with us).
- In 2022, we decided to move out of state, and her mother agreed she wanted the property sold and tasked us with the sale- the property was in my mother in laws name this entire time.
- We closed on the house and after the HELOC lien was paid, the leftover amount was wired to my wife's mother's bank.
- My wife's mother, the previous owner of the house, agreed she only wanted back the amount of her initial investment on the purchase of the house, and wanted to wire my wife and I the remainder of the proceeds of the house.
- The residence was purchased for $150,000 by my mother in law in 2010. The house sold in 2022 for $400,000.
We are trying to figure out the tax implications on our end. We never actually owned the house since it was in my wife's mother's name the entire time we were living there.
