when I sell home will I be taxed?

What is the name of your state? California. In 1998, my mom (83yrs old) added my name on title to her home, so she can qualify for a equity loan (her income wasnt sufficient to qualify alone). In 2001, mom quit claim title into my name only, I then took out a mortgage loan to refinance her 1st & 2nd under my name only. The home has become my primary residence since then. Mom now wants to sell house, we recieved an offer. Once escrow closes and check is issued to me, I will then transfer it to her. My question is: will I be subject to gift tax or inheritence tax? Should I add her name back on title? to avoid this.

[Souix]

Originally posted by rarellan
What is the name of your state? California. In 1998, my mom (83yrs old) added my name on title to her home, so she can qualify for a equity loan (her income wasnt sufficient to qualify alone). In 2001, mom quit claim title into my name only, I then took out a mortgage loan to refinance her 1st & 2nd under my name only. The home has become my primary residence since then. Mom now wants to sell house, we recieved an offer. Once escrow closes and check is issued to me, I will then transfer it to her. My question is: will I be subject to gift tax or inheritence tax? Should I add her name back on title? to avoid this.

***At closing escrow will have you sign a 1099 reporting any income to the IRS and since your name is on title, the 1099 will be in your name. What you do on your income tax return is between your accountant and yourself. My advice is to speak to your accountant***

[abezon]

Don't add her name back onto the title. She will not qualify for the primary residence exclusion. You'll have to file a gift tax return any year you give her more than $11,000. This will reduce the amount of your estate that passes tax-free when you die. Could you keep the money in a special account and let her draw on it as needed?

Thank you for your response. Can I open a savings account and just add my mom to the savings account?

[abezon]

Yes, but that makes the entire account a gift all at once. It's better to open a dedicated account and either give her money regularly or as she needs it.