No, you will not need to report on your tax return any profits from the sale. You are not part owners just because you pay the mortgage. You would actually have to be on the deed for you to be considered a partial owner of the property.
Additionally your parent can take the gain exclusion as long as you considered the home your "primary residence" for 2 of the last 5 years. If you have a capital gain from the sale of your main home, you may qualify to exclude up to $250,000 of that gain from your income. You may qualify to exclude up to $500,000 of that gain if you file a joint return with your spouse So if this home was used as a primary residence for your parent, there would be no reporting requirement if the gain is less than the exclusion amount.
See this IRS link for more information on the exclusion:
https://www.irs.gov/taxtopics/tc701.html
However, if you are on the deed (because a portion of the house was gifted to you) and this was not your primary residence, you would have to report any gain on the sale as the gain on the sale of a capital asset (You do not report a loss on the sale of a personal capital asset). You would only need to report the gain on your percentage of the house.
To enter this
transaction in TurboTax Online or Desktop, please follow these steps:
- Once
you are in your tax return, click on the “Federal Taxes” tab
("Personal" tab in TurboTax Home & Business)
- Next click on “Wages &
Income” ("Personal Income" in TurboTax Home & Business)
- Next click on “I’ll choose
what I work on”
- Scroll down the screen until
to come to the section “Investment Income”
- Choose “Stocks, Mutual Funds,
Bonds, Other” and select “start’ (or “update” is you have already worked
on this section) (see Screenshot #1)
- The
first screen will ask if you sold any investments during the current tax
year (This includes any sale of real property held as an investment
property so answer “yes” to this question)
- Since you did not receive a
1099-B, answer “no” to the 1099-B question
- Choose type of investment you
sold - select everything else
- Some basic information:
- Description –
Usually the address of the property sold
- Sales Proceeds – Your net
proceeds from the sale
- Date Sold – Date you sold
the property
- Tell us how you acquired the
property - purchased
- Enter the your cost basis-
cost plus capital improvements less any depreciation deducted or allowable
as a deduction less any casualty losses take on the property.
- Date acquired - Date of acquistion
- If you had a loss, on the
question of "Did you use this property for business or
investment?" If the property was not used for any personal use,
you will answer that this was for investment. Otherwise, you will not be
able to deduct the capital loss of a personal use capital asset.
-
Click this link
for further information about reporting
the sale of a capital asset
