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Discussion Forum Index --> Tax Questions --> Sale of Residence, 2 Owners
Kathyt (talk|edits) said:
| 2 February 2007
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| My client bought a home 3 years ago, but they didn't have the credit to buy it on their own, so client's parents obtained the mortgage. Client has lived in the house for 2 years, parents have not. Client's name is on the deed, and so is parents. Title person says that when they sell the house, both she and her parents will be issued a 1099. The gain will be about 50,000. My client has paid all of the notes, parents have paid nothing. I do both returns, her's and her parents. Client's gain on the sale is simple enough, she lived in & owned it for 3 years. But what about the parents? I remember something about equitable ownership, they never paid a dime on the house, can someone point me in the right direction on the parents?
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Riley2 (talk|edits) said:
| 3 February 2007
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| A nominal owner who is not a beneficial or equitable owner of the property would not be subject to capital gains tax on the sale of the property. Thus, if the parents have never assumed the benefits and burdens of ownership, they will not be responsible for reporting any part of the gain from the sale of the property.
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Kathyt (talk|edits) said:
| 5 February 2007
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| Thanks for the response, the parents will not get any money. So if they really do send a 1099 to the parents, just zero it out on the return?
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Solomon (talk|edits) said:
| 5 February 2007
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| Do you mean a 1099-S? Is not only the sale price reported on it? If so, sales price and cost the same on D.
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Caleon06 (talk|edits) said:
| 9 April 2007
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| What if the Client is not in the Deed ? just the parents are.
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Riley2 (talk|edits) said:
| 10 April 2007
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| The fact that the client is not on the deed will not cause the parents to be taxed on this sale.
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HLCPA (talk|edits) said:
| 8 May 2007
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| If A alone is on title, but A and B are on the loan. But B has been living there for years, but A has not, as B had bad credit. How can you get the 1099S in B's name,when he is not on title? Can A not show any sale, and have B pick up the whole sale and take the exclusion? Thanks
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Riley2 (talk|edits) said:
| 8 May 2007
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| Who made the down payment? Who made the payments? Who is entitled to the sales proceeds?
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HLCPA (talk|edits) said:
| 8 May 2007
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| B made the payments, but A took the deductions.
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