Parents bought home in 1986 for $29,500, then
recorded a warranty deed to their 3 daughters in 2009.
parents still live in home and pay utilities, property taxes and homeowners insurance.(no mortgage)
Daughters have never claimed home on their tax returns nor collected rent.
now - home is being sold and parents relocated to different city to be closer to family and daughters are buying a condo for parents to live in there, again no mortgage and no rent will be collected.
1. How do daughters show this sale on tax returns? (2nd home)?? (Vacation home)?
2. Can we deduct the improvements that have been done over the years which is around $60,000, to offset some of the long term capital gains?
3. When calculating long term gains, do we use price parents bought for or value of property when it was deeded to us?
4. I assume the 3 daughters need to file tax returns this year in the same format etc
5. Since parents are in their 80’s, if they pass away within 2 years, do daughters have a penalty?
6. Is there a dollar amount the IRS doesn’t require to show receipts of improvements?
thank you
