Discussion:Beneficial ownership
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Discussion Forum Index --> Tax Questions --> Beneficial ownership
| 6 July 2007 | |
| Parents lived in residence which was owned by them but daughter was also on the title and was sole obligor on the mortgage.
Parents made some of the mortgage payments, plus paid for all of the maintenance, utilities, and generally assumed the obligations of ownership. Daughter also made some of the mortgage payments. House was sold and parents retained all of the proceeds. Do you think it's a stretch to consider the parents as beneficial owners for purposes of the sec 121 exclusion? We would contemplate considering the prior principal payments by the daughter as having been gifts to the parents (no gift tax returns having been required because the amount was under $12,000 per year). Thanks | |
| 6 July 2007 | |
| This is really a question of intent. If there was never any intent to give the daughter an equitable ownership in the property and her name was on title merely to facilitate financing, then I see no problem with claiming the 121 exclusion. However, if the daughter had an equitable ownership in the property and she relinquished the equitable ownership interest at the time of sale, then the 121 exclusion should be claimed on the parent's portion of the residence only. | |
Seattlemojo (talk|edits) said: | 15 July 2007 |
| what constitutes Beneficial ownership?
Does monetary consideration need to be exchanged? If person "A" owns the home (subject to a mortgage) and person "B" moves in and helps to pay the mortgage as well as its share of the utilities and upkeep on the home - though "B" has no financial obligation nor equity, can "B" still claim its proportional share of the interst payments on their ("B"'s) income tax as a deduction on Schd A. "A" and "B" are unmarried | |
| July 15, 2007 | |
| See also the excellent summary article that Solomon has put together at Equitable or Beneficial Ownership.
- Tim Doyle, TaxAlmanac Moderator - Talk to me 10:17, 15 July 2007 (CDT) | |
Seattlemojo (talk|edits) said: | 16 July 2007 |
| T
Thanks yeah I read that. But the situation I'm in (ie "B" above) is not as cut snd dried as the Mother/Son scenario written about there. Both "A" and "I" live in the house together so there is no distinct border between us - in terms of use. MoJo | |
