Capital Gains
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Capital Gains

I will be selling a property to a family member all cash and to save money we are not going to be using a title company only an attorney that will do the paperwork to put house in her name. I understand I will have some capital gains that I have to report which i am completely fine with it, I just need to understand whose job it is to handle the form 1099-S or how do I report the sale of the house to ensure I don’t get in trouble. 

2 Replies
Anonymous
Not applicable

Capital Gains

from 1099-S instructions

 

If no closing disclosure is used the person responsible for closing the transaction is the one who files the 1099-S, in the following order:

 

apparently, one attorney is going to represent both parties at the closing so it's him or her so a) and b) would be the same


a. The transferee's attorney who is present at the delivery of
either the transferee's note or a significant part of the cash
proceeds to the transferor or who prepares or reviews the
preparation of the documents transferring legal or equitable
ownership; 
b. The transferor's attorney who is present at the delivery of
either the transferee's note or a significant part of the cash
proceeds to the transferor or who prepares or reviews the
preparation of the documents transferring legal or equitable
ownership

Level 14

Capital Gains

Be aware that, if you sell the property to a family member at a price below its fair market value, you will have given them a "gift of equity", which may require you to file a gift tax return.  "Gift of equity" is explained in this web reference:

https://www.investopedia.com/terms/g/gift_of_equity.asp

**Answers are correct to the best of my ability but do not constitute tax or legal advice.**

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