Be sure you split the basis and closing costs between you and your mom.
If he is the only one drawing from the IRA, then it is possible, depending on how much he is pulling out and the profit from the sale of the home, that you would make out better filing a separate return especially if your profit is less than $40,400.
The Capital Gains rates for Married filing separately
- Up to $40,400 0%
- $40,401 to $250,800 15%
- Over $250,800 20%
Married Filing Jointly
- $80,800 0%
- $80,801- $501,600 15%
- Over $501,601 20%
You can enter your info in TurboTax with and without him and then enter his without you, then add together the tax or refund due from each return. This way, you will know for certain if filing separately helps or not.
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