Tax Question

[dvtldav]

Hopefully an accountant or lawyer can answer this for me. A few years ago, my wife was gifted a house by her parents. The paperwork from the attorney had a gifted value for the house. This summer, my wife sold the house. Is her capital gains, the difference in what she sold it for and the value listed on the paperwork from the attorney? If not what are the capital gains based on?

Dave

[Bert31]

Re: Tax Question

Hopefully an accountant or lawyer can answer this for me. A few years ago, my wife was gifted a house by her parents. The paperwork from the attorney had a gifted value for the house. This summer, my wife sold the house. Is her capital gains, the difference in what she sold it for and the value listed on the paperwork from the attorney? If not what are the capital gains based on?

Dave

Did Her Parents file a Gift Tax Return when the gifted the house to her?

When you aswer that, I can ask some of the guys at the CPA firm I used to work for. I never dealt is gift returns, I primarily did company's financial statement audits. I did a few corporate, individual and not for profit returns but never any gift tax returns.

[dvtldav]

Re: Tax Question

[quote=Bert31;277628]Did Her Parents file a Gift Tax Return when the gifted the house to her?

Yes they did. The attorney filed it and did whatever he needed to do.

Dave

[Mort Corey]

Re: Tax Question

Not a CPA, but my understanding would be that capital gains would be due on the amount over the basis cost....ie the stated amount when the gift was made. If you've lived in the house for a given period then there might not be any taxes at all (up to $500K per couple IIRC). If the house has been rented, then there are other considerations that come into play.

Mort

[Bert31]

Re: Tax Question

Not a CPA, but my understanding would be that capital gains would be due on the amount over the basis cost....ie the stated amount when the gift was made. If you've lived in the house for a given period then there might not be any taxes at all (up to $500K per couple IIRC). If the house has been rented, then there are other considerations that come into play.

Mort

Correct. If they owned the home for five years and lived in the home for three of those five years, no capital gains taxes. If they rented the home, then they will need to recapture the depreciation they expensed.

[dvtldav]

Re: Tax Question

Thanks for your replies. We did not live in the house or rent it. My mother-in-law lived in it until this summer.
Dave