bored_one wrote:

- quote -

From the facts you presented it looks like wishful thinking.
You should consult with a local tax professional (EA or CPA)
to ensure that you pay only the tax you owe, no more and no
less. It is possible that you will have to file an amended
2003 income tax return or a late gift tax return for that
year.

Good luck.

Regards,
Bill

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bored_one wrote:

- quote -

You are not correct but you are thinking wishfully.

Property transfers between spouses are not taxable events.
You did not recognize gain or loss when you transferred
title to either house. Instead, you take your spouse's
basis.

So, in this case, when you put your wife on title, the total
basis in that house remained unchanged. The only effect,
taxwise, is that your basis is now 1/2 of what it was and
your wife's basis is also 1/2 of the same total.

Likewise, when she transferred 1/2 of the other house to
you, you assumed her basis in that house. So, you have a
gain (or loss) equal to the difference between the $200,000
your mother in law and the basis you acquired on the
transfer. You do not provide any information on that basis,
so there is no way to tell how much tax (if any) you might
owe.

Are you sure your wife transferred 1/2 of the house to you?
Or, did she transfer 1/2 of her interest?

Lanny K. Williams, CPA
Nawarat, Williams & Co., Ltd.
Income Tax Services for Expatriate Americans

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"bored_one" <creativecopy[at]yahoo.com> wrote:

- quote -

Transfers between spouses do not give rise to taxable
income, ever. But the purchase of your half of the home by
your M-I-L does result in a taxable transaction. The gain or
loss depends on your tax basis in the property. I suspect
that is a complex issue best dealt with by a tax pro in your
area.

--
Tom Healy, CPA
Boulder, CO
Web: http://www.tomhealycpa.com

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In November, 2003, I put my wife on title for half of a
house I owned, which at the time was valued at $700,000. In
return, my wife signed over to me half of a house that she
owned with her mother, as a joint tenancy. The mother
purchased my half of the house in 2004 for $200,000. Since
the half interest in the house that I signed over to my wife
is larger then the amount I received for the half interest
of the house I sold, it would seem there is no capital gains
profit to pay tax on. Am I correct, or is it just wishful
thinking on my part?

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