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CPA advice about realty

41mag

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We recently were “given” a house by my mother , for all legal concerns. The house was quit claim deeded to me.
Now her CPA is saying that she owes a bunch of money to the irs because of this gift.

The only thing i can find is the possibility of capital gains taxes on me . That has no bearing on her.

Does this sound right? I can’t get the CPA to call me, my mother is old, she gets confused easily.
I told her to hold everything and dont give anyone any money until I investigate it.

She also says we have to present an appraisal of the house...its worth is about $250k right now. Paid $115k .
I did not see any problem with this.

Any help appreciated !
Thanks
 
Not a CPA but you or your mom shouldn’t owe any taxes unless you sell right away in which case you will owe a ton of taxes on the appreciation from $115k. If you live in it two years then sell, you won’t owe capital gains up to a certain amount.

If she is going to continue living in it, it’s a much better idea for you to inherit the property as your cost basis will be current market value. As a gift, your cost basis is the $115k she originally paid for the home. You need to consult with a tax pro.
 
Not a CPA but you or your mom shouldn’t owe any taxes unless you sell right away in which case you will owe a ton of taxes on the appreciation from $115k. If you live in it two years then sell, you won’t owe capital gains up to a certain amount.

If she is going to continue living in it, it’s a much better idea for you to inherit the property as your cost basis will be current market value. As a gift, your cost basis is the $115k she originally paid for the home. You need to consult with a tax pro.
Thanks for chiming in.
This is a house that we wanted but instead of a mtg she bought it, we lived in it and paid her back in monthly notes. When we paid her back, she gave it to us....last June 2020.
The capital gains doesnt kick in for us unless we sell, like you said, before the two year mark, AND the gains on the gift must be less than $350k .
So i dont see anything there.

i don’t believe she owes anything because she did not gain anything....she lost.
I think she is just confused. Which we will get straight.

i just wanted to make sure there was nothing i am missing.
 
Gift tax is a real thing. You might want to check out giving it back to her and giving her a life estate or figuring out something else. Might even just have her sell it and put the money in her estate.
 
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