Sale of home to family member with joint gift of e...
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Returning Member

Sale of home to family member with joint gift of equity

My husband and I bought a home in 2003 for $145,00 and have allowed my sister to live there for years due to the fact that she could not afford a place of her own.  The house was never rented to her and we did not make any income from this house.  We have now sold the house to her and also gave her a joint gift of equity of $30,500.  We sold her the home for $152,000 minus the $30,500.  How do I go about filing my 2019 taxes on these 2 events.  Will both my husband and I have to fill out a form 709 with the split amount or can that be done on one form?  Also how do I complete the sale of the house?  Will the sale price be the appraised value or sale value?  

3 Replies
Expert Alumni

Sale of home to family member with joint gift of equity

You should report the sale as the sale of a second home.

 

The sale price is the loan payoff amount.  But you can't deduct a loss on the transaction, because it is personal. If you report it as a second home, the loss will not appear on your return.

 

The gift is the difference between the loan payoff amount and the appraised value.

 

You can report the gift either as from one of you, or you can split it and file two estate and gift returns.

 

To report the sale of a second home in TurboTax:

 

Type 'second home sale' into the search box

Then select 'Go to sold second home'

You will be asked 'Did or will you receive a 1099-B form or brokerage statement for these sales?' say no

You will be asked 'What type of investment did you sell?' select 'Second home'

 

 

 

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Returning Member

Sale of home to family member with joint gift of equity

Thank you, I reread my question and revised it and I am not sure if your response is still accurate to my question.  Please let me know if this makes sense and if your answer is still the same

Employee Tax Expert

Sale of home to family member with joint gift of equity

The answer will still be the same.

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