Capital Gain taxs on house owned with my Mom for 2 years , Mom passed I became owner

[frankdigiu]

My mom  in her last years was too old to care for herself so My wife and I moved in with her for close to 28 months before she passed . I owned the house with mom for two years  she added me to deed before  . I do own another house too. 

Mom pass away in November 2023.  I sold the house April 2024. and moved back to my other home .

Since I owned the home with my Mom jointly and became sol owner time of her death . Would Capital Gains tax apply fully to me?  I am 69 and my wife 68 we are both on social security only income. Also gave half of the sale of the home to my only brother since there was no Will.

[KrisD15]

My first question is how were you added to the Deed?  If your mother used a "Life estate" the house would be treated as inherited on the date of her death and would probably show no gain on the sale. Your basis would be the fair Market Value on that date. 

If you are unsure, ask the attorney she used to add you, or ask the Title Company that handled the sale. 

[frankdigiu]

I did use a lawyer to help add me. And country clerk did say write check for small amount day of adding me and give to my mom to deposit,  I do have the forms I sent copy to title company before settled,

thank you for reply

[frankdigiu]

It  was done by lawyer as Quitclaim deed transfer joint tenant with with of survivorship   grantee  transfer made for amount of 1.00 . I did this June 4 2023 with county

the title company reads  being said land and premises which became vested in [moms name ] and [my name] joint tenant with right of survivorship  by deed from [moms name] dated june 4th 2022 and recorded june 8 2022 in clerks office in deed 

I run through my  Turbotax  home and business software after all questions and enter cause of sale death and price and - commissions fees and other fees  and repairs made to sell .  Not show gains due .  price was under 240k after .   fair market on date of death was close to sale price  . maybe 10k over   Thank you for your help.

[KrisD15]

You became owner of half the property on June 4th, 2022 or 2023, (you seem to say both, so maybe a typo). 

Half your basis is half the value on the date you became half owner.

You inherited the other half, so the other half of your basis is half the value on her date of passing. 

So if the value when you became half owner was 200,000, your half basis is 100,000.

If the house was worth 250,000 on the date of her passing, your other half basis is 125,000 so your total basis would be 225,000.

If it sold for 240,000, you would have a gain of 15,000 but then you would need to subtract selling costs. Selling costs would probably be around 15,000 depending (in part) on the commission you paid so it would be close to no gain no loss. 

If you gave your brother half, (over 18,000 single or over 36,000 if joint ) you would need to file a gift tax return Form 709. 

TurboTax does not support Form 709 and it is not part of your federal return. 

Form 709 is reported to let the IRS know the gift was made, it usually has no tax consequences for you or the person you gifted,  if your lifetime total of gift giving is less than 13.61 million single or 27.98 Joint. 

Form 709 is fairly simple to fill out and can be mailed. HERE are instructions for Form 709. 

[frankdigiu]

thank you so much for info   this helps me understand better 

[frankdigiu]

So this could be why software not saying any gains on sale?   I tried few times  and entered as full owner on date of death . sold 273k after comm and fees 21k   then replacing HAVC system and Hot water tank as updated house   and  all repairs to bring to code to sell close to 30k