My mothers home is also in my name

[Vleka]

I need some advice. My mothers home is also in my name. She has passed away and I need to sell her house and split the money three ways with my siblings. What is the best way to do that without everyone getting dinged by taxes? Can I gift it to them? Can I just deposit my share in the bank or do I have to reinvest it in another house? I would appreciate any advice you can give me. Thank you.

[retiredguy123]

I need some advice. My mothers home is also in my name. She has passed away and I need to sell her house and split the money three ways with my siblings. What is the best way to do that without everyone getting dinged by taxes? Can I gift it to them? Can I just deposit my share in the bank or do I have to reinvest it in another house? I would appreciate any advice you can give me. Thank you.
You should ask tax expert or estate attorney this question. But, if the entire house is an inheritance (stated in a will) to all three siblings, then there are no taxes due. But, if you inherited the entire house, and you are giving the other siblings a share of the proceeds as a gift, your siblings would not owe any tax, but you may owe an estate tax, depending on the amount of your total estate. To eliminate the estate tax, you could deposit the money into your bank account, and give them $16,000 per year each until all the money has been gifted. Another way to do it is to lend them their share with an official loan document, and then forgive $16,000 of the loan every year as a gift. This would ensure that your estate tax liability would not increase.

[Stu from NYC]

You need to speak to a tax expert/lawyer on how to do this.

[Boomer]

I am not a CPA or an attorney, but you definitely need to meet with one. When it comes to estate tax, attorneys often refer to an accountant anyway — or some law firms have them in-house. I would not use a financial planner for this — unless they also happen to be tax accountants. This is most likely beyond regular tax preparers.

(I think there are places where lawyers take a percentage of the entire estate — not just their hourly. I don’t know how that works though or if it varies by state and/or custom. But it’s good to be aware of the possibility.)

I doubt that estate tax will be an issue because very few estates exceed the Federal exemption which is 12.06 million for 2022 and I don’t think Florida has a state estate tax.

In 1997 the tax law changed to the benefit of those selling their primary residence. Before that time, investing in a bigger house was the only way to avoid capital gains tax on profit.

The 1997 tax law change was also when the taxpayer-friendly exemption of $250,0000/$500,000 meant no cap gains tax on profit below those single/married amounts if the owner had lived in the house for 2 years. . .actually I think it’s two out of 5 years before selling. (Small builders and small flippers love this 1997 tax law change — along with the rest of us primary residence homeowners. It was that 1997 tax law change that allowed a lot of people to downsize — and to happily get a tax-free chunk of change at the closing table. This can be especially beneficial to retirees.)

But yours is not your primary residence, so therein lies the rub — or one of them anyway. If you need to close the gap between the house’s purchase price and selling price, see if you can find records of any improvements. If you use a real estate agent, I am pretty sure their fee can become part of closing that gap. (But, I reiterate — I am not an attorney or an accountant.)

The gift tax exemption for 2022 is $16,000 per recipient. But I think some tax forms might need to be filed anyway because of the lifetime gift exemption — not sure though.

This could get a little complicated. I am assuming the type of deed means you are now the full owner of the house, making you the one who will have to take any capital gains tax hit. Your siblings will not. I don’t know if living in the house for 2 years, as your primary residence, would help you or not. That probably would involve the bigger picture. And I am not sure how you establish cost-basis on this anyway. Better ask though.

I better stop now, other than to advise you to get professional advice as soon as you can. Write down all the questions you have and take them with you to your appointment. Going in prepared and taking notes is going to help you get a handle on this situation.

Good luck to you — and I hope your relationship with your siblings is a really good one. They say you never know someone until you have to share an estate with them. (And please do not comment on that here. And do not give any numbers for amounts involved. It’s none of our business.)

Boomer

PS: I can pretty much guarantee that you will get contacted by private message here, with inquiries about the house you plan to sell. But your first order of business is to get professional advice. (If it were me, I would start with a CPA.)

PPS: Also, please keep in mind that it is quite possible that I have no idea what I am talking about.

[EdFNJ]

And yet another first post from someone who joined this forum 5 years ago. Where have all these posters been all these years!? Welcome back! :D Anyway, an internet forum isn't the place to go for that type of advice. If I told you I was a tax accountant and estate attorney, would you do what I said? Hopefully not but I'd bet you are aware of that.

[Boomer]

And yet another first post from someone who joined this forum 5 years ago. Where have all these posters been all these years!? Welcome back! :D Anyway, an internet forum isn't the place to go for that type of advice. If I told you I was a tax accountant and estate attorney, would you do what I said? Hopefully not but I'd bet you are aware of that.


Aw, c’mon, Ed, please lighten up. Sometimes people do not know where to start and asking old (er, more experienced) people can be a way to at least get a handle on where to begin — by getting ideas for what kind of questions to ask a professional.

Picking up a little of the pertinent vocabulary, and knowing what you don’t know, before going into a meeting with a professional, really can help. Nothing wrong with doing a little homework first.

I always preface my posts on such matters as this one by telling the poster who asked that I am not the kind of professional they need. But, yeah, I give them some starting points if I can and try to send them off in the right direction.

And, I can never resist the chance to write an Ode to the Tax Relief Act of 1997 — that sure made a big difference in our real estate transactions with primary residences since.

As far as the date of joining goes, maybe they had no reason to post before. (Not everybody likes to goof off writing posts like I do when I am at home procrastinating instead of doing useful stuff.) Also, I sometimes wonder if there are those who do not want to be told to Google or to pay for a professional or get other snarky answers to their posts.

Also, as far as spotting join dates is concerned, I don’t wonder about the old join dates. I sometimes wonder though about the more recent ones — but only if the newer poster seems to have showed up only to pursue their one-track agenda. They stand out to me like sore thumbs. Some of those one-note samba posters are not as new as they want us to think they are though. Patterns of writing can look awfully familiar sometimes. So I guess everybody’s got somethin’ they see — if they have been around here long enough.

Oh well, I need to shut up now because I still have tax stuff to get together for us — to give to a CPA.

Boomer

[manaboutown]

A competent estate attorney can give you the answers. How does the deed read? Lady Bird, TOD, JTWROS, TinC, and so on? Any will? Too many unknowns here for me to even comment.

[dewilson58]

A competent estate attorney can give you the answers. How does the deed read? Lady Bird, TOD, JTWROS, TinC, and so on? Any will? Too many unknowns here for me to even comment.

OP...............This is the only post you need.

:ho:

[Packer Fan]

Some good advice - see a Tax focused CPA or Lawyer.
However, anyone reading this - YOU DON'T WANT TO CO-OWN A HOUSE WITH YOUR PARENTS. Then when they die, you just sell the house at the stepped up tax value and split the money. Not a big deal. When you are the owner also, then the value does NOT get stepped up so there may be capital gains issues, especially if Mom owned the house for a long time. If you lived there with her, you might skip this but then you have gift issues as stated previously.

If you own a home with your parents do a quit claim deed and get your name OFF the property.

[DAVES]

I am not a CPA or an attorney, but you definitely need to meet with one. When it comes to estate tax, attorneys often refer to an accountant anyway — or some law firms have them in-house. I would not use a financial planner for this — unless they also happen to be tax accountants. This is most likely beyond regular tax preparers.

(I think there are places where lawyers take a percentage of the entire estate — not just their hourly. I don’t know how that works though or if it varies by state and/or custom. But it’s good to be aware of the possibility.)

I doubt that estate tax will be an issue because very few estates exceed the Federal exemption which is 12.06 million for 2022 and I don’t think Florida has a state estate tax.

In 1997 the tax law changed to the benefit of those selling their primary residence. Before that time, investing in a bigger house was the only way to avoid capital gains tax on profit.

The 1997 tax law change was also when the taxpayer-friendly exemption of $250,0000/$500,000 meant no cap gains tax on profit below those single/married amounts if the owner had lived in the house for 2 years. . .actually I think it’s two out of 5 years before selling. (Small builders and small flippers love this 1997 tax law change — along with the rest of us primary residence homeowners. It was that 1997 tax law change that allowed a lot of people to downsize — and to happily get a tax-free chunk of change at the closing table. This can be especially beneficial to retirees.)

But yours is not your primary residence, so therein lies the rub — or one of them anyway. If you need to close the gap between the house’s purchase price and selling price, see if you can find records of any improvements. If you use a real estate agent, I am pretty sure their fee can become part of closing that gap. (But, I reiterate — I am not an attorney or an accountant.)

The gift tax exemption for 2022 is $16,000 per recipient. But I think some tax forms might need to be filed anyway because of the lifetime gift exemption — not sure though.

This could get a little complicated. I am assuming the type of deed means you are now the full owner of the house, making you the one who will have to take any capital gains tax hit. Your siblings will not. I don’t know if living in the house for 2 years, as your primary residence, would help you or not. That probably would involve the bigger picture. And I am not sure how you establish cost-basis on this anyway. Better ask though.

I better stop now, other than to advise you to get professional advice as soon as you can. Write down all the questions you have and take them with you to your appointment. Going in prepared and taking notes is going to help you get a handle on this situation.

Good luck to you — and I hope your relationship with your siblings is a really good one. They say you never know someone until you have to share an estate with them. (And please do not comment on that here. And do not give any numbers for amounts involved. It’s none of our business.)

Boomer

PS: I can pretty much guarantee that you will get contacted by private message here, with inquiries about the house you plan to sell. But your first order of business is to get professional advice. If it were me, I would start with a CPA.)

PPS: Also, please keep in mind that it is quite possible that I have no idea what I am talking about.


Far as lawyers taking a percentage of the estate. I confess, I have a very negative view of attorneys and that is based on experience with several.

See the situation. You hire someone and sign so much per hour. Who keeps track of the hours-they do. Verify the hours-you can't.

The attorney for my mother's estate. At the end he sent a bill for if, I recall like 5,000 no statement attached. When we demanded a statement he was not happy-don't you trust me? On review, he charged us several hours at $300 an hour to instruct named assistant who he also billed at $200 an hour. Yup, $500 an hour. And who was his assistant. A little research. He was a law STUDENT working for free to add to his resume. Honor? Ethics? My sister wanted this attorney. I expect my brother in law, who knew this guy was getting a piece. I had a flat rate estimate for 3,000 from another attorney. I explained it all to this atty and told him I was going to send it all to the bar for review. HE CUT HIS BILL TO THE 3,000.

For we non-attorneys that is grand larceny or perhaps attempted grand larceny. Our legal system. Terms like YOUR HONOR. It is on the business card. Sadly, often the only place it is.

[Boomer]

. . .

[Boomer]

Some good advice - see a Tax focused CPA or Lawyer.
However, anyone reading this - YOU DON'T WANT TO CO-OWN A HOUSE WITH YOUR PARENTS. Then when they die, you just sell the house at the stepped up tax value and split the money. Not a big deal. When you are the owner also, then the value does NOT get stepped up so there may be capital gains issues, especially if Mom owned the house for a long time. If you lived there with her, you might skip this but then you have gift issues as stated previously.

If you own a home with your parents do a quit claim deed and get your name OFF the property.


Not only that, but while the parent is still alive, if the co-owning kid gets into a legal problem, house ownership might be in jeopardy.

[retiredguy123]

Far as lawyers taking a percentage of the estate. I confess, I have a very negative view of attorneys and that is based on experience with several.

See the situation. You hire someone and sign so much per hour. Who keeps track of the hours-they do. Verify the hours-you can't.

The attorney for my mother's estate. At the end he sent a bill for if, I recall like 5,000 no statement attached. When we demanded a statement he was not happy-don't you trust me? On review, he charged us several hours at $300 an hour to instruct named assistant who he also billed at $200 an hour. Yup, $500 an hour. And who was his assistant. A little research. He was a law STUDENT working for free to add to his resume. Honor? Ethics? My sister wanted this attorney. I expect my brother in law, who knew this guy was getting a piece. I had a flat rate estimate for 3,000 from another attorney. I explained it all to this atty and told him I was going to send it all to the bar for review. HE CUT HIS BILL TO THE 3,000.

For we non-attorneys that is grand larceny or perhaps attempted grand larceny. Our legal system. Terms like YOUR HONOR. It is on the business card. Sadly, often the only place it is.
I would never hire an attorney by the hour.

[Jayhawk]

I would never hire an attorney by the hour.

I stayed in a Holiday Inn Express last night, but I'd still recommend you get a professional opinion from an attorney. Could be the best money you will spend.

[Boomer]

I would never hire an attorney by the hour.


Never say never, retiredguy123.

I knew there was a percentage thing in Ohio, but I did not know what it was, so I looked it up. Yessirreebob, I went straight to the Google. I sure did. Just like I’m supposed to. . .right.

I read on some lawyer’s site that Ohio Law says that legal fees must be “reasonable” and 2 - 2.5 % is deemed reasonable as a percentage of the estate for the lawyer. :22yikes:

Sometimes certain firms, perhaps the hoity-toity ones, want and get those percentages and they hold on to that, while others will do it by the hour.

I don’t know about Florida. But wherever it is, it pays to know how that fee works.

”My mama told me — you better shop around.”

Boomer

[rjm1cc]

I did not read all of the prior comments but some are pretty good.
My assumptions
The home was titled in both names with right of survivorship. Thus the home is not part of the probate estate and is yours.
You did not live in the home.
You will owe capital gains tax on the difference between the sales price and probably your mothers basis.
When your name was added to the deed did you pay your half of the cost or was a gift made to you? Was a gift tax return filed in that year. My guess is it was required but I do not know the dollars.
You will make a gift to who ever you give the funds too. Probably need a gift tax return but probably no gift tax.
Might talk to an attorney and see if you can maintain the home was not gifted to you when your name was added, you disclaim any interest in the home, the home passes as part of the estate (and avoids the capital gains tax you would incur when you sell) and if the three of you are in the will no taxes. Yes talk to an attorney to see if you can undo the adding of your name to the deed.
You probably do not have a Federal estate tax as I assume the estate is under 11million.

[manaboutown]

Far as lawyers taking a percentage of the estate. I confess, I have a very negative view of attorneys and that is based on experience with several.

See the situation. You hire someone and sign so much per hour. Who keeps track of the hours-they do. Verify the hours-you can't.

The attorney for my mother's estate. At the end he sent a bill for if, I recall like 5,000 no statement attached. When we demanded a statement he was not happy-don't you trust me? On review, he charged us several hours at $300 an hour to instruct named assistant who he also billed at $200 an hour. Yup, $500 an hour. And who was his assistant. A little research. He was a law STUDENT working for free to add to his resume. Honor? Ethics? My sister wanted this attorney. I expect my brother in law, who knew this guy was getting a piece. I had a flat rate estimate for 3,000 from another attorney. I explained it all to this atty and told him I was going to send it all to the bar for review. HE CUT HIS BILL TO THE 3,000.

For we non-attorneys that is grand larceny or perhaps attempted grand larceny. Our legal system. Terms like YOUR HONOR. It is on the business card. Sadly, often the only place it is.

Contractors, plumbers, roofers, electricians, auto repair shops, real estate agents and even MDs do the same thing in my experience.

[Eg_cruz]

I need some advice. My mothers home is also in my name. She has passed away and I need to sell her house and split the money three ways with my siblings. What is the best way to do that without everyone getting dinged by taxes? Can I gift it to them? Can I just deposit my share in the bank or do I have to reinvest it in another house? I would appreciate any advice you can give me. Thank you.
If you were part owner (house in your name) your half or what ever portion was in your name is not Stepped Up. The portion that was your moms is Stepped Up no taxes on the the sell of her portion of the gains when the house is sold. You need to go back to the time you added yourself to the ownership of the home to figure out the value of the home at that time, when you sell the home the gain is based on gains on your portion from the time you took part ownership and what the house sold. Your portion of the gains are taxable, they are not Stepped Up.
In FL there is no need to add your child to your home because of the homestead protection.
Seek CPA help.

[Ele201]

I need some advice. My mothers home is also in my name. She has passed away and I need to sell her house and split the money three ways with my siblings. What is the best way to do that without everyone getting dinged by taxes? Can I gift it to them? Can I just deposit my share in the bank or do I have to reinvest it in another house? I would appreciate any advice you can give me. Thank you.You really need the assistance of an estate attorney. I can understand your reluctance to hire one. It will cost you money and there’s the trust/honesty factor. You didn’t mention if the home is in The Villages or elsewhere. Look for a good recommendation for an estate attorney in your town, interview a few if need be. You’ll want someone honest and (most importantly) someone you are comfortable with and can work with. Good luck!

[dsbouley]

I would definitely take the advice from everyone on this forum over a attorney any day.

[mkjelenbaas]

I need some advice. My mothers home is also in my name. She has passed away and I need to sell her house and split the money three ways with my siblings. What is the best way to do that without everyone getting dinged by taxes? Can I gift it to them? Can I just deposit my share in the bank or do I have to reinvest it in another house? I would appreciate any advice you can give me. Thank you.
What did the attorney you called say???

[Singerlady]

Can you say lawyer?

[tsmall22204]

Thats what attorneys are for. Why on earth would you take advice from TOTV?

[Proveone]

I need some advice. My mothers home is also in my name. She has passed away and I need to sell her house and split the money three ways with my siblings. What is the best way to do that without everyone getting dinged by taxes? Can I gift it to them? Can I just deposit my share in the bank or do I have to reinvest it in another house? I would appreciate any advice you can give me. Thank you.
First of all, you should have Quit Claimed the deed/house when she was alive. Secondly, you need to see an estate attorney!

[Haggar]

The tax consequences and the legal consequences will significantly change depending upon how the house is titled. Example 1: Jane Doe and John Smith Example 2: Jane Doe and John Smith, Joint Tenants with Rights of Survivorship. Etc.

See a professional!

[davem4616]

OP, by now you should have been able to read 'the tea leaves' that you should seek council from a competent tax professional

Play the cards above the table with your siblings, keeping them in the loop...

[Alittlepieceofparadice]

All seems to be good advise. Not sure of the state where your property is located but I know from experience you must abide by the home states laws. I would suggest you contact state and city offices for probate and they can steer you in the right direction. Also the lawyer or CPA should be licensed in the state the property is located. If property is in Ohio a Florida lawyer is more than likely a . waste of your time. Good luck!

[joseppe]

I need some advice. My mothers home is also in my name. She has passed away and I need to sell her house and split the money three ways with my siblings. What is the best way to do that without everyone getting dinged by taxes? Can I gift it to them? Can I just deposit my share in the bank or do I have to reinvest it in another house? I would appreciate any advice you can give me. Thank you.

In simple terms, if the house was already in your name (and only your name) then there is no inheritance of the house. It was already yours. When you sell it you may incur capital gains and be taxed as such, but that depends on a number of factors.

[Fredman]

I believe there will be capital gains due.

[Yvonnebang]

In simple terms, if the house was already in your name (and only your name) then there is no inheritance of the house. It was already yours. When you sell it you may incur capital gains and be taxed as such, but that depends on a number of factors.

Joseppe, can you elaborate on your point about how it "depends on a number of factors"? If it was a gift (the house deed name changed to your child's) While you were alive, then it would be capital gain exempt when the child decides to sell, right?

[Boomer]

Just for the record, the OP never said a lawyer or accountant would not be contacted. This is just one of those questions some like to ask as a starting point. There is nothing wrong with that. It does not mean the person asking is stupid or cheap or naive. Just floating a question out there. Geez.

I am about ready to get out the Grey Goose or the Woodford Reserve and start doing a shot every time a poster’s only contribution to this thread is to tell the OP to get a lawyer.

But I don’t really drink much so I better not do that. Who knows what I could end up posting before the thread ends.

Boomer

[Haggar]

Joseppe, can you elaborate on your point about how it "depends on a number of factors"? If it was a gift (the house deed name changed to your child's) While you were alive, then it would be capital gain exempt when the child decides to sell, right?
When a gift is received such as stock or a house the beneficiary retains the basis the donor has - no step in basis.
Quit claim is gift so no step up in basis. Upon death the beneficiary would have gotten a step up for the portion the deceased had.

How the property is titled is critical both for taxes and estate. A mother and son own a house - Jane Doe and John Doe. The son passes away. The son's share of the house does not automatically go the mother because it was not titled "Joint Tenants Right of Survivorship". Since the son had no children his half of the house went to his mother and his father who was divorced by the son's mother. Now the mother owns 75% of the house and the divorced father owns 25%. The father was a good guy and gave up his 1/4 to the mother. Could be a lot worse because the title lawyer screwed up. Father could have retained 25% of the house the mother lived in - and would have received 25% of the proceeds when the house is sold.

Different tax results owning a house together instead in JTROS.

Check the title of all property now to make sure it is correctly titled. Both the property you own and your relatives!