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Rental Property Assumption

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moondawg2

Junior Member
California:
Purchased a home 10 years ago that I lived in for five years. One the fifth year I moved out and rented the home to my mother in law. For five years she lived in the house and was a 'renter'. Last year in July she was able to take ownership of the house and the deed and assummed the loan.

There was no money exchanged, just the assumption, but I do have six months of rental income from the property.

Does anyone have experience with the tax implications of giving property to a famly member that has been a 'renter' and assummed the loan. Turbo Tax is not quite revealing the answer on this one yet.

-thanks
 


tdavidl

Member
first, assuming you were renting it to your mom-in-law at near fair value, you had a rental property to report on schedule E for 6 months.

i believe you then "sold" the property to your mom-in-law for at least the amount of the debt. if the value of the house exceeded the debt balance, you may have to claim the excess as part of the selling price as well.

upon the sale of a business property you then have to calculate gain or loss.

i suggest you consult with a tax professional for this year as this transaction has several complexities that i doubt turbo tax can handle.
 

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