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My father in law signed his property over equally to my husband and his sister for $1.00 when he found out he was terminally ill with cancer and he had a life lease. He has since passed and my sister in law wants to buy my husband's half of the property and move in. After a title search we found there was a lien on the property. We have decided to go ahead withe sale as it has been an "ugly" situation to begin with. It seems she will end up ahead in all of this. My question is, will we have to pay capital gains tax on this. The amount of the sale is $75,000, less the $7,500 lien we have to pay as well as the title transfer fee. Please if anyone can advise. We live in New York State.

Posted: Wed Sep 14, 2011 7:38 pm Post subject:

Hi khilliker,

If you receive any profit from the sale of the property, then you will be liable for paying the capital gains taxes. However, if your husband transfers the property as a gift, then he will be liable for paying the gift taxes. Nevertheless, it will be better if you could contact a tax adviser and take his opinion in this matter.

adonis · Posted: Wed Sep 14, 2011 7:40 pm Post subject:

It was me above!! Just forgot to log in.

sabrinatoss · Posted: Wed Sep 14, 2011 8:08 pm Post subject:

It is calculated on the cost basis, which is the amount of cash and debt obligation used to pay for a property, along with the fair market value of other property or services the purchaser provided in the transaction.

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