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

[MaryK4]

You cannot change the % because you paid the taxes, you should have deducted the taxes in the year you paid them.

@hchegini90

[ADavis2]

I have a similar situation.  

I have a house I own with my mother, as joint tenants.  I have resided in the house as my primary residence for 10+ years.  My mother has claimed her portion as a rental and depreciated it about $51K.  

Original cost basis: $343,466

Closing Cost will be approx: $39,000 with repairs approx: $7,000.

Selling price would be $600,000 for an estimate profit for approx: $270,000 based on the cost basis from the depreciation taken and closing cost. 

$270K/ 2= $135: Each.  Since this is my primary residents I am gain free but for my mother the gains would be based on $135K?  

[AnnetteB6]

Depreciation is only taken into account when calculating your mother's gain or loss on the sale of the property.  Your half was never depreciated since it was not rented.

For a ballpark figure for the calculations for each of you, take half of the original cost basis and add half of any basis adjustments (closing costs, major improvements over the years it was owned) and compare it to half of the proceeds of the sale.  

Then, for your mother's share, the basis from the calculation above is reduced further by the total depreciation that was taken over the period of ownership and rental.  

@ADavis2

[Hal_Al]

"Then, for your mother's share, the basis from the calculation above is reduced further by the total depreciation that was taken over the period of ownership and rental".  

The depreciation "recapture" is taxed differently than the rest of the capital gain.  In TurboTax (TT), do not include the depreciation reduction when you enter her basis.  Instead make a separate entry for the depreciation taken over the years. The TT interview will guide you. 

[MartyRL]

My Mom bought a house for $150K 17 years ago.  About 10 years ago she added me (her son) as a co-owner. I have never lived in the house as a co-tenant or taken rental income.  I have shared maintenance expenses.  Now my mom wants to sell the house and expects it to sell for $225K with a mortgage balance of about $100K so "we" will be paid about $55K each after fees.  My 'share' will be given to my mother.  I plan to sell my own home in the next year or so and at that time  will want to take advantage of the capital gains exemption on sale of home. So - on my mothers home - do I need to pay capital gains tax?  What is my basis since I never invested in the house?  Can I re-assign the title 100% back to her before selling to avoid any tax?

[Critter-3]

Seek local guidance from a local RE attorney who can set up the property transfer correctly as this could be messy if not done correctly.  

[mooseclan]

My son and I are co-owners of a single family home we have rented out for the past 4 years.  I guaranteed his first loan, therefore I had my name placed on the deed at the time.  He has handled all rental operations, invested his own funds, claimed 100% of the income/expenses on his taxes, etc.  We are selling this property and I'm wondering if he claims 100% of the capital gains as long-term or do we have to split these gains somehow?

[Hal_Al]

@mooseclan 

Your son reports it all since he has 100% beneficial interest.  You only problem will be if you get a 1099-S, for the sale.  In that case, you'll have to use a work around to report 0 capital gain.*

*Report the 1099-S amount as gross proceeds and the same amount as cost basis, on form 8949.

[Critter-3]

Talk to your attorney or the closing company and get your name off the deed if possible before the sale. 

[KSashasingh78]

Hi, 

My Dad and I own this house in California. He lives with my sister in Dallas, Texas and so he has a Texas drivers license.  He also lives with me about 50% of time.  His name is on the deed of this house in California as well as on the mortgage.  He does not own any other house.  

We have owned this house since June 2012 (8 years) and are now selling.

Question: How much can each person deduct on the net capital gains ? If suppose our net gain was over $1,000,000?

Thank you,

Asha

[Lori147]

Hello,

My client and siblings inherited property when parents passed.  They passed in 2000 and sold the land in 2016 and got paid in 2017.

So i use the FMV at time of death for purchase price. Do i split the cost three ways when entering on tax return.

And split the sale price/ expenses three ways.

[xmasbaby0]

@Lori147 "My client"?  Paid tax preparers are not allowed to use TurboTax.  If you are a paid preparer you should be using one of the professional software versions and ask questions on the site for pros.

https://proconnect.intuit.com/?s_cid=TT.com_MoreProds-Footer_ProTaxSoftware

[M-MTax]

Fine for Lori147 asking here but if she is a paid preparer and doesn't know the basics of property sold after being inherited I'm shocked that she has clients or even one client.

[Hal_Al]

Q.  So i use the FMV at time of death for purchase price. Do i split the cost three ways when entering on tax return?

A. Yes.

Q.  And split the sale price/ expenses three ways?

A. Yes, assuming an equal split of the gain?  The probably comes if the 1099-S is only issue in one name.  There are several ways to adjust that.  The most common is to adjust that persons cost basis.

[rlbatistejr]

My wife and I bought a condo in Massachusetts before we were married and purchased it as joint tenants. We sold the condo for a profit after one year but before the two years capital gains exclusion concluded. My wife and I file "married filing separately" because of student loans.

Can I take 100% of the gains for the sale?