When we bought our house, our credit wasn't in the best of shape so we financed it in my mother in laws name as she is disabled/retired and does live with us. Now we are wanting to sell and buy a new house in our name. My concern is if we sell this house the check will be made out to my Mother in law since it is in her name. Will she be able to give that money to us to put towards our new house or will we have to pay taxes on it? Will she have some sort of penalty for giving us the funds? Does the full amount have to go back into the new house?
