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Hi,
I am hoping someone here can help me understand the tax implications of this.
I am being bought out of my mortgage on a home I own along with 1 other person. I am the only person on the mortgage the two of us are on the deed. A 3rd party will be paying off the balance of the mortgage I am on and I will gladly sign over the deed (giving me a lump sum to buy me out)to them. I spoke with my mortgage company and they have stated it will be a traditional payoff.
What is uncle sam/IRS going to see this as? Will I be taxed on the value of the total purchase price of the home? Or only half since there were 2 people on the deed but only 1 on the mortgage? How does this work? I just want to make sure that I will not have any residual fees come tax season 2016.
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