Posted on: 22nd Feb, 2009 12:50 pm
my sister and i received my dad's lake house after he passed away and his sister signed over the quit claim deed to us.
the house was refinance and the mortgage was put in our name.
this past year my sister decided she wanted to tear down the existing house, rebuild and move into the new house so i signed a quit claim deed over to her. she paid off the remaining mortgage and took out a construction perm loan to build the new house.
in our agreement, when the construction perm loan is converted to a conventual mortgage she will then pay me my share of the original house.
do i have any tax concerns?
the house was refinance and the mortgage was put in our name.
this past year my sister decided she wanted to tear down the existing house, rebuild and move into the new house so i signed a quit claim deed over to her. she paid off the remaining mortgage and took out a construction perm loan to build the new house.
in our agreement, when the construction perm loan is converted to a conventual mortgage she will then pay me my share of the original house.
do i have any tax concerns?
Hi blackey,
I don't think you need to pay any taxes because your sister will be buying you out and you'll be getting money in exchange for your share in the property. You are getting the money neither as a gift or as any sort of capital gains. You will get the money as per an buyout agreement which both of you agreed upon.
I don't think you need to pay any taxes because your sister will be buying you out and you'll be getting money in exchange for your share in the property. You are getting the money neither as a gift or as any sort of capital gains. You will get the money as per an buyout agreement which both of you agreed upon.
Thank you for the reply!!! Does anyone else have any thoughts? Also, any ideas on how I go about disclosing this on my returns? Mortgage interest has been deduced for about 4 years so I'm imaging that this needs to be disclosed?
Hi blackey,
As the guest had mentioned in his/her post, you need not pay any taxes for the money you receive from your sister. Therefore, you do not have to disclose this on your returns. However, if you still have doubts, you can consult with a tax advisor.
Thanks,
Jerry
As the guest had mentioned in his/her post, you need not pay any taxes for the money you receive from your sister. Therefore, you do not have to disclose this on your returns. However, if you still have doubts, you can consult with a tax advisor.
Thanks,
Jerry