"Gene E. Utterback, EA" <eagent[at]alliancetax.com> wrote:
- quote -

I disagree that the values to be used are "AS REPORTED ON
THE GIFT TAX RETURN." The basis for an asset acquired as a
gift is the basis in the hands of the last person to receive
the property in a transaction other than a gift. In all
probability, the basis of both portions of this property is
the basis in the hands of your mother. If she received the
house as a gift, though, you will need to go back even
further.

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rws314 wrote:

- quote -

You've probably already guessed the answer, and that is that
the sale will be taxable to you.

Your problem though is how to determine what your mother's
basis (cost) in the house is. You might want to consult
local tax pro here, but generally speaking your cost is her
cost, and her cost may be influenced by a factor such as did
she and your deceased father jointly own the house when he
died? Further, if they jointly owned the house, how did
they obtain it? bought it? inherited it? Could be
complicated.

Cheer$,
Harlan Lunsford, EA in LA

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"rws314" <rws314[at]comcast.net> wrote:

- quote -

Probably as a gift with your mom's basis as yours.

--
Sincerely,
Joanne

If it's right for you, then it's right, . . . . . for you!!!

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"rws314" <rws314[at]comcast.net> wrote:

- quote -

Good question - it seems your mother made a gift to you and
your brother when she transferred the house for less than
fair and full consideration, assuming of course that the
house was worth more than $20. If so, mom should have filed
a gift tax return, whether any gift tax due is another
question which I will ignore at this point. Did mom file a
gift tax return, and if so what did she report the value of
the gift to be?

Then when your brother transferred the house to you for $10
another gift may have ocurred, again assuming the house was
worth more than $20. Did your brother file a gift tax
return, and if so what did he report the value of the gift
to be?

Simply add one have of the value from your mom's gift to you
to the value of your brother's gift to you - AS REPORTED ON
THE GIFT TAX RETURN - to establish your basis in the house
for calculating your gain on the sale.

If no gift tax returns were filed you may have use your
mother's basis in the house to calculate the gain to you.

Of course, you may have another problem altogether. If the
"gifts" were nothing more than shams designed to hide assets
from the assisted care facility you may have legal problems.

Your best course of action at this point to find a good tax
professional in your area and pay for a few hours of time
for them to analyze the situation. You might even want to
find a tax attorney - your situation could be THAT bad.

Good luck,
Gene E. Utterback, EA

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Eight years ago my mother transferred her house to my
brother and me for $10. A year ago, my brother transferred
his part to me for $10. My mother has lived in the house
alone until a few months ago when she moved into an assisted
living facility.

I am about to sell the house. How will this be treated by
the IRS?

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