U.S. CitiesCity-Data Forum Index
Go Back   City-Data Forum > General Forums > Real Estate
 [Register]
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
View detailed profile (Advanced) or search
site with Google Custom Search

Search Forums  (Advanced)
 
Old 04-01-2013, 09:29 AM
 
209 posts, read 289,515 times
Reputation: 178

Advertisements

In Oct. of 2012, I sold an investment property to my sister, for her to live in. It was a single family home. I only wanted $180,000 for the house, which was valued around $245k, so I gave her a 20% gift of equity. The purchase price on record was $231,000, but I only received right around $180k since I paid her closing costs as well. Her "down payment" was the 20% equity I gifted to her of $46200. It wasn't money that ever changed hands, I just gifted her equity that was then applied as her down payment.

Originally, I paid $171,000 for the house. So I have a few questions, that the TurboTax online community was unable to answer:

1. Since the home was, to me, an investment property, what do I owe capital gains on? The $231k, or the $180k net (minus the original purchase price and taking into account depreciation recapture, etc).

2. The gift exclusion I think is $13000 - my understanding is that I don't actually pay any tax on the difference, but it comes out of my $1M lifetime gift allowance, or something...I'm not sure how this works.

Does anyone have help for me on this?
Rate this post positively Reply With Quote Quick reply to this message

 
Old 04-01-2013, 12:22 PM
 
Location: Ocala, FL
5,155 posts, read 8,013,386 times
Reputation: 5585
In my opinion, you should consult a CPA or tax attorney for the correct answer.
Rate this post positively Reply With Quote Quick reply to this message
 
Old 04-01-2013, 12:59 PM
 
4,567 posts, read 9,661,864 times
Reputation: 6666
Too many variables based on your personal tax situation and hers. You need to talk to a tax preparer along with all of your paperwork to discuss your specific situation.
Rate this post positively Reply With Quote Quick reply to this message
 
Old 04-01-2013, 02:30 PM
 
Location: The Triad (NC)
31,943 posts, read 73,507,684 times
Reputation: 38886
The term you need to investigate is called "arms length"
You need to be on the right side of that issue
Rate this post positively Reply With Quote Quick reply to this message
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.

Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.


Reply
Please update this thread with any new information or opinions. This open thread is still read by thousands of people, so we encourage all additional points of view.

Quick Reply
Message:

Over $104,000 in prizes was already given out to active posters on our forum and additional giveaways are planned!

Go Back   City-Data Forum > General Forums > Real Estate

All times are GMT -6.

© 2005-2021, Advameg, Inc. · Please obey Forum Rules · Terms of Use and Privacy Policy · Bug Bounty

City-Data.com - Contact Us - Archive 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28, 29, 30, 31, 32, 33, 34, 35, 36, 37 - Top