Tax Year Prior to 2020: How should I report taxes on joint owners' house sale?

[Hal_Al]

Q.  So, for filling purposes,  what amounts are the ones needed to be reported;  $88,351 or $49K?

A.  $88,351.  When asked for the expenses of sale, you may deduct your share of the fees and commission (but not the mortgage payoff).  

[glezis91]

Hello,

I have joint ownership on my primary residence with my mom.  She co-signed on the loan, and I am pretty sure she is on the deed as well.  She owns her own house, and thus does not live at the property I'm referring to.  I have owned this property for 2 years, and have $200k+ in capital gains.  My question is, will I be eligible to defer these 2 year capital gain taxes since it was my primary residence.  Will my mom being on the deed, and living elsewhere jeopardize the 2 year residency capital gain rule?

[MarilynG]

Since you have lived in your primary residence for two of the last five years, you should be eligible for the Home Sale Exclusion of up to 250K for a Single person.

if this applies, you don't need to enter info about your Home Sale in TurboTax, unless you received a 1099-S.

If so, here's How to Enter a 1099-S.

If your Capital Gain on the sale is over 250K and you have verified that your mom is also on the deed (and you received a 1099-S for the full amount of sale proceeds), you can report your share and 'Nominee' your mom's share to her. 

@glezis91

[Bounge22]

I have a similar situation and I'm wondering what you and your mother ended up doing and what the tax implications were. Any reply will be appreciated. Thank you!

[Bounge22]

Any expert advice on my situation will be appreciated. Here it is:

In 2017 my father and I bought my primary residence. The purchase price was $430,000. He put in $200,000 and I put in the remaining $230,000 and I also paid all the costs incurred with owning the house. We are listed as joint tenants on title. The home is my primary residence. It is not, and never has been, my father's primary residence. We are planning to sell the home in 2022 and we anticipate approximately $250,000 in gain. He is willing to gift me all equity in the home, but we're not sure the best way to go about this and any help will be appreciated. Our plan is for him to quit-claim the deed to me, then file a 709 reporting that he gave me a gift of half the value of the sale of the property. Is this okay? Will it cause any trouble with the IRS? We are willing to pay capital gains taxes on his portion of the gain if necessary, but we'd rather not if we don't have to. Are there any other tax implications that we should be aware of? Thank you. 

[Hal_Al]

I'm of the opinion that taxes "follow the money".  If you keep all the gain (you father gets no more than his original investment back), you report all the gain on your tax return and can claim the full home sale exclusion. 

But, I cannot quote a source for that opinion.  I do recall seeing that answer before in this forum. 

[Critter-3]

Our plan is for him to quit-claim the deed to me, then file a 709….This is a valid Plan as long as it doesn’t violate local law. Check with your closing company and/or attorney to make sure that this is legal in your state.

[ahoss75]

I am selling a property my girlfriend and I bought together. We are not married and file individually. Am I able to split it 100-0, so I would file the full gains on only one of our taxes?

[NCperson]

@ahoss75 - if you are each selling your respective 50% interest, then you each need to report it that way.

How long did you two live in the home? what is the expected profit? 

[ahoss75]

@NCperson  - Thanks for your reply. We bought in Fall 2013 and lived there for a little over 1 year. I have been renting it out ever since, and have been putting all rental income/costs on my tax return only, since I am the one that takes care of everything involved with the rental. Her name is on the deed, but she is otherwise an uninvolved silent partner. She is not on the mortgage. Purchase price was $81K and selling for $115K.

[NCperson]

@ahoss75 - unless someone else responds with a different thought, this is pretty messy and could take someone local with tax experience to resolve.  did you depreciate it over the years it was a rental? 

[Critter-3]

Back to my original answer ...  seek local professional assistance so you get this done correctly.   RUN to a local tax pro if you have not been taking depreciation correctly as this needs to be fixed.  Seems like you need to do a quit claim so the sale is in your name only and flows to the form 4797 on your return only. 

[mkelly3362]

My mother lives in a house that both her and my name are on the deed as joint owners. When we purchased the house, I put up 25% of the purchase price and my mom put up 75%. We now want to sell the house. I will actually receive 25% of the proceeds. Can I report only the 25% of total sales price as income or will I need to report 50% since we are co-owners?

[Hal_Al]

@mkelly3362  , Simple answer: 25%.  In general, taxes "follow the money".

Since your mother lived in the house, as her primary residence, for 2+ years, she can exclude, from federal income tax, up to $250,000 of her gain on the sale.  But, since it was not also your residence, your will have to pay capital gain tax on your share.

[Critter-3]

Make sure the closing company reports the sale properly on the 1099-S and the form you get with your name on it only reports the 25% of the sale which represents your portion of the sale.