Residence signed over to 3 siblings before death. Siblings sold to another family member. Mortgage company suggested gift of equity by siblings to younger family member so he could qualify for home mortgage. Sales agreement completed by lawyer listed house price at $136,000. with $43,990 gift of equity. The actual basis of house before signed over to siblings was $78,000. Siblings only received $89,000 for house. Is sales price and actual basis used to figure gain. Mortgage company said the basis would be the sales price minus the gift of equity, not the $136,000 minus $78,000 basis of mother who signed it over to her three childred. Can't find answer in IRS publication. Hope someone can help!
-
-
If the basis is correct, then it is $11,000 gain (89K-78K). The listing price is immaterial.
BTW, do you know how the basis was determined? -
Gift of Equity
The children who received the house took their Mom's original basis and added the improvements made over the years that they had receipts for (porch added, etc.).
Doesn't the IRS question since the full sales price is what is on the documents that were reported to them? Do I have to be concerned that the three children each gave a gift of 14663 instead of 12000 each?
Thanks.Comment
Comment