My father passed away 3 years ago. He left a house to my mom in Florida. She is from and lives in Canada. The house was bought for $560000, will likely sell for $470000. Mortgage owed is $240000. My mom wants to give me the money after paying the mortgage. Am I best to have her sell us the house for $1 and then I sell it. Should she put it in my name too then we sell it together? Or should she sell it and give me the money? What is the best tax strategy? Currently the house is being rented. He owned it for a decade. He put about $20000 into up keep.
thanks
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More information is needed. If your father left the house to your mom (and she was not already co-owner), her cost basis is the fair market value of the property on the date of your father’s death. Her cost basis is not your father’s cost basis. So, the $560,000 purchase price, $20,000 upkeep, and $240,000 mortgage balance are not relevant.
If your mother continued to rent the property during the three years she owned it, there is depreciation recapture to deal with.
The simple answer to your question is that the person in the lower tax bracket should be the one selling the property, if sold at a profit. So, she should , most likely, sell it and give you the money.
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