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Anonymous
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Will they or I end up paying capital gains on the the property they are selling if the money goes towards paying mortgage?

Capital Gain question. I bought an investment property in FL and took out a mortgage. My parents are planning to live there full time. Currently i'm on a title for my parents primary residence, they are selling the property and want to pay off my mortgage 100% for the property I bought for them to live in. Will they or I end up paying capital gains on the the property they are selling? Will they able to payoff my mortgage directly from their bank account?

1 Reply
TomD8
Level 15

Will they or I end up paying capital gains on the the property they are selling if the money goes towards paying mortgage?

If you are an owner of the property (your name is on the deed), and you never lived in the home as your primary residence, then you are subject to the capital gains tax based on your percentage of ownership.  In other words (for example), if you are a 50% co-owner with your parents, your share of any gain when the property is sold would be 50%, and you would be subject to the capital gains tax on that portion.  How the sale proceeds are used makes no difference.

**Answers are correct to the best of my ability but do not constitute tax or legal advice.

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