Long Shot

[BOB W]

Final .....

Has anyone come up with a final answer that everyone can agree to?????

[jainen]

I don't mind

I don't mind if everybody agrees with me (as long as I don't have to agree with them).

[veritas]

This is to good to drop.

I would say thay daughter can exclude the gain for the sale of a personal residence if she meets the ownership/residence test.

I am thinking I would do the same for the mother.


So "No Tax".

[veritas]

Ok BobW what's your decision?

[Unregistrd]

After all is done

After all is done make sure the 1099's reflect it! otherwise the can of worms will be open later!

[OldJack]

In 2004, DAUGHTER, borrows $52,000 against the property and builds an addition onto the rear of her own house. Mother is unable to care for herself, and daughter builds the addition so she can take care of her mother. For two years, daughter has been paying interest only on the borrowed $52,000.

There may be verbal agreements between mother and daughter that we are not aware of in this case. If so a single word of testimony from the individuals could easily change all of our conclusions.

It would appear to me that the gift from parents to daughter has been completed (mother relinquished power over) when mother allows daughter to move-in with an addition to the home costing $52,000. Mother has given up any life estate in exchange for daughters care in daughters home. Daughter didn't build herself a new house on mothers land, she has taken mothers house by just moving in with adding an improvement and as such has received/accepted the gift of the entire property. Daughters basis is mothers gift basis (½ step-up from father) plus the $52,000 paid by daughter. Daughter may qualify for §121 if she meets the requirements.

[Gretel]

I second that. After reading all posts on this thread again I stayed somewhat confused until I read Old Jack's response. This feels true in my heart. Hope Snag hasn't decided yet.