rochonuscg[at]aol.com (RochonUSCG) wrote:

- quote -

The taxable capital gain will be the difference between the
value when your mother inherited it and the amount she sold
it for.

- quote -

You subtract your purchase price (plus other costs for
things you may have spent on the property - check with your
tax preparer to determine what qualifies) from the sale
price. If you were living there.

If it was rental property you are required to depreciate the
property, and recapture (that is, pay tax on) any
depreciation upon sale.

Stu

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RochonUSCG <rochonuscg[at]aol.com> wrote:

- quote -

If the property is worth 26000 and she sells it to you for
20000 that would raise a flag.

And if she turns out to have a loss through this "related
party" sale of her rental property she cannot deduct that
loss.

So first of all, she should sell it to you for fair market
value, and she could have a gain.

The maximum gain rate depends on the type of gain, which
could be 25% or 20% or even 10%. A local tax professional
can be of great assistance here. And there could be state
and local tax issues on sale of this rental as well.

One way to defer tax on the full gain is to take back some
of the mortgage on an installment sale. This way the gain is
recognized as small bite sized pieces ovcer several years,
which could lower the tax bracket.

__
Art Kamlet ArtKamlet [at] AOL.com Columbus OH K2PZH

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My mother is selling her rental property to us for $20K,
which she inherited from a friend 3 years ago in a
succession. We are buying the property with cash because we
want to relieve her of this burden. Will she have to pay
capital gains tax and how much with her fixed income of
$1300 per month at 79 years old? There is an investor who
may later buy it from us for $26K. I suspect we have to pay
capital gains tax with our tax bracket of 35%, but would
like to know what is the amount it is based on? Thanks!
Stephen Rochon

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