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Helped Parent Buy a House Now Want to Sell

3 years ago I helped my Mom purchase a house.  I am on the loan, she could not qualify on her own, and title as Joint Tenants with Right of Survivorship.  The home has been remodeled and appreciated over the last three years and it has been used as my Mom's primary residence.  She is going to move in with my family and we are considering selling the property.  We stand to make approximately $75,000 and maybe a little less when all of the costs are deducted.  As my Mom's primary residence she would not have to pay capitol gains for her portion of the proceeds.  But, since i'm on the loan and title, but not living there, will I be responsible for capital gains on any portion of that?  I'd just as soon take my name off title if that means my mom gets 100% of the proceeds.  However, i'd still be on the loan because I don't think she could refi and have both the loan and title in her name only prior to selling.  So, I essentially want to make sure that my Mom benefits 100% from the sale of the house and not me and not just because I may have to pay taxes on the proceeds, but that's certainly part of it.  Our tax advisor told me to reinvest my portion to avoid taxes but I can't do a 1031 exchange because it's not an income property...

2 Replies
Level 5

Helped Parent Buy a House Now Want to Sell

Tell the title company you want the entire proceeds to go to Mom. You'll have to sign docs at closing.....ask the title company to issue a 1099S in her name and SSN.

Level 15

Helped Parent Buy a House Now Want to Sell

I don't think that will fly with the IRS, since they are Joint owners. Each much declare 50% of the profits (if any).

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