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QUIT CLAIMS

Posted on: 01st Mar, 2009 06:28 am
7 YEARS AGO PARENTS QUIT CLAIMED HOUSE TO MY SISTER AND I THEY LIVED IN HOUSE UNTIL THEY BOTH DIED THIS YEAR. WE SOLD HOUSE AND SPLIT THE PROCEEDS. DO WE PAY INCOME TAX ON ALL THE PROCEEDS RECEIVED./Is the tax owed just added to our incomes?
Hi ghagenkord,

You might have to pay taxes on the sales proceeds. But you can also get an exemption of $250,000 ($500,000 for married couples). If the gain exceeds this limit you need to pay taxes and it is to be included in the schedule D, Capital Gains & Losses. However, to qualify for the exemption, the house you sell has to be your primary residence. You can determine the gain or loss on the sale in the following way:
Selling price minus (-) selling expenses = Amount realized on sale
Amount realized on sale minus (-) adjusted basis in the home = Net gain or loss on the sale.

Thanks,

Jerry
Posted on: 02nd Mar, 2009 04:42 am
If this is primary house then only you are eligible for the tax benefits. but you need to keep in mind that even if you want to save some more tax (if the value is well above $ 250000) then you can go for the option of trust.(which you control)

In this case you will quitclaim this property to trust then trust will sell further to somebody who is interested but although it seems to be little complicated but surely save your taxes.Remember you need to adopt this process only & only if it is crossing $ 2,50000. :wink:
Posted on: 02nd Mar, 2009 06:16 am
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