- quote -

1. In theory if it was her residence and she owned a share
for at least 2 of last 5 years her gain on sale in a
nontaxable event for the sums you mention.

2. The sale of ones personal residence has limited reporting
duties.

3. The gift portion of the deal, to the extent that it
excees $11,000 would suggest that Mom is required to file a
gift tax return (no money, just a paper form)

4. HOWEVER, the value of a 25% share not on the deed is
subject to a major major discount from what you think is 25%
of the whole--Hint: I'm suggesting no gift tax return may
be necessary either

5. LASTLY there is a potential can of worms as to selling a
residence where I was not the listed owner and having to
show I was an equitable owner. Mom should win the point but
why go there.

6. Mom should ask her tax pro about simply making no reports
at all.

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My friend's mom did a "Quit Claim Deed", selling her 25%
interest in a home (property) she was living at (for more
than 2 years) to her Aunt for $30,000 (which is way below
market value... long story). My friend's mom basically
wanted to get out of the house (she, the aunt, and 2 others
had bought the home years ago but only the aunt's name is on
the property). My questions:

1) is this considered a "sale", and therefore, my friend's
mom is not subject to taxes since the profit is less than
$250,000.

2) or is it considered something else, and my friend's mom
should report the $30,000 on her income tax somewhere.

She is worried whether or not she has to report the $30,000
anywhere on the income tax form or is it her Aunt that is
responsible for reporting the transfer. Any help would be
appreciated. Thanks!

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