QUESTION
How should we deal with taxes on a house owned by 3 people?
Asked on Jul 14th, 2015 on Taxation - Michigan
More details to this question:
My deceased father-in-law placed his house in his 3 kids name about 15 years ago, naming them as owners. He also made it out to them as a gift. Upon his death in March of 2014 we sold the house. The 3 kids received about $ 9,800 each. What records do we need for taxes and how do we go about it for a straight 1040 ez form?
2 ANSWERS
Commercial & Bankruptcy Law Attorney serving Powell, OH
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Ronald K. Nims
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You need to find out what your father-in-law paid for the house. In Ohio, that is on file at the county auditor's office. Any gain over the price paid is a taxable capital gain. If you have a loss, it's not deductible because it was personal not business use. When you have taxable capital gain, you're required to file Form 1040 with Schedule D attached.
Answered on Jul 20th, 2015 at 1:02 AM
Appellate Attorney serving Grosse Pointe Farms, MI
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Musilli Brennan Associates, PLLC
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The income is to the recipients, not to the deceased father-in-law's estate. The basis for the home would have to be established and there will be a capital gains tax if the value increased over the time that the property was held. You should see an attorney or an accountant.
Answered on Jul 14th, 2015 at 1:14 PM