sale of house

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  • superman
    Senior Member
    • Feb 2007
    • 158

    #1

    sale of house

    Client just came in and has an issue from 2006 with the sale of a home. Client went on deed when her mom refied her house in 2001 mom died and they sold the house to split the money between the siblings. Client never filed her tax return and now IRS is putting a levy on her income saying that she owes for the sale of the house.

    Question:
    Would I do a sch D on the sale of the house with the cost basis of what her mom paid for the house 30 yrs prior then client pays tax on the profit because she was techinically an owner prior to death with the refi that put her on the deed as a co-owner?

    I think this is the way to do it but just wanted to get a second opinion.

    Thanks,
    Superman
  • superman
    Senior Member
    • Feb 2007
    • 158

    #2
    just bringing to the top

    Comment

    • Burke
      Senior Member
      • Jan 2008
      • 7068

      #3
      Note that if Mom continued to live in house and client's name was on deed simply due to refi, AND if they sold house after she died, client & heirs got stepped-up basis. She still should have shown it on Sche D on her tax return, of course. Should have no gain if it was sold shortly after death.

      Comment

      • Kram BergGold
        Senior Member
        • Jun 2006
        • 2112

        #4
        Date of Death

        When did the Mom die?

        Comment

        • Davc
          Senior Member
          • Dec 2006
          • 1088

          #5
          Originally posted by Burke
          Note that if Mom continued to live in house and client's name was on deed simply due to refi,* AND if they sold house after she died, client & heirs got stepped-up basis. She still should have shown it on Sche D on her tax return, of course. Should have no gain if it was sold shortly after death.
          *Assuming client didn't move in and assume half of the benefits and burdens of ownership.

          And assuming the title was JTWROS then only your client reports the sale and possibly gifts to the siblings.

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