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Report tax - Grant Deed

I transferred my name from my home (previously in me and brother's name) via grant deed to my brother and sister.  I received less money for my share of the home and do not have capital gains.  Which turbo tax version should I use and what section should I report the home transfer in?  Would this still be considered selling the home?  Thank you.

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5 Replies
PatriciaV
Employee Tax Expert

Report tax - Grant Deed

Yes, if you received payment for the transfer of title on the home, this transaction would be considered the Sale of Your Home.

 

You need to report the gain if ANY of the following is true. 

  • You have taxable gain on your home sale (or on the residential portion of your property if you made separate calculations for home and business) and do not qualify to exclude
  • You received Form 1099-S. If so, you must report the sale even if you have no taxable gain to report.
  • You wish to report your gain as taxable gain even though some or all of it is eligible for exclusion. You may wish to do this if, for example, you plan to sell another property that qualifies as a home within the next two years, and that property is likely to have a larger gain. If you choose to report, rather than exclude, your taxable gain, you can go back later and undo that choice by filing an amended return, but only within 3 calendar years after the year of sale. 

If NONE of the three bullets above is true, you do not need to report your home sale on your tax return.

 

You can enter the information in TurboTax under Sale of Home and let TurboTax help you decide if you need to report it or not. However, this topic is not available in the free version.

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Report tax - Grant Deed

Thank you very much for the detailed explanation.  Also, since I received less money for my share, it looks like I might need to file a gift tax form also?  Is that correct?  Thank you.

PatriciaV
Employee Tax Expert

Report tax - Grant Deed

No, you would not file a gift tax return for this transaction because you didn't give away your property (or money).

 

Report only the proceeds you were paid and the basis for your portion of the home. The difference between the proceeds you received and the total paid is not reportable for tax purposes.

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Report tax - Grant Deed

My situation was that I owned only 25% of the home and therefore was only paid a little less than (minus fees and missed payments) that 25% for my share. 

example: home is worth $1,000,000 and I own 25% share.  I received $220,000 (25% or $250,000-$30,000 fees/missed payments) 

Therefore, technically I did receive full money for my share of the home.???..(receive full compensation for the property that’s been given)

But it is less than the property's full value since property is worth $1,000,000. (receive compensation that’s less than the property's full value)

I appreciate your time and response.  

 

I was reading this link https://turbotax.intuit.com/tax-tips/estates/the-gift-tax-made-simple/L5tGWVC8N 

What is the gift tax?

The gift tax is a federal tax that the IRS imposes on people that gift property. The gift tax is applicable when you receive nothing in exchange, or receive compensation that’s less than the property's full value. 

This can include, but isn’t limited to:

  • Cash
  • Real estate
  • Art
  • Interest-free loans
  • Vehicles

Note that whether or not you intend for the property to be a gift, the gift tax applies if you don’t receive full compensation for the property that’s been given.

 

So I am a little confused. 

PatriciaV
Employee Tax Expert

Report tax - Grant Deed

You were paid a fair value for the property you owned, even if it was less than the actual value of the property. This transaction was not a gift. A loss on a sale is not considered a gift.

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