Tax on sale of Moms house

[janebauer]

What is the name of your state? Illinois
My Mom, a widow, sold her house in May 2006, three days later she passed away. A week later, at the closing, we found out she had added my name to the title in 1993 after my Dad passed away.
They gave us two checks for the proceeds of the house, one in my name, and one in my Mom's name, with my name being the inheritor.
She had a will and left everything to me (I am her only child)
I have never resided in that house.

Will I have to pay taxes on my portion of the proceeds or on the entire portion or on any portion?
Thanks, JaneWhat is the name of your state?

 

[tranquility]

It depends on how you were added to the title (and what the basis amount was on the house). You need to gather more information, but you will probably owe capital gains taxes on the portion that came directly to you and not on the amount you inherited. See a tax professional this year to help you.

 

[moburkes]

What is the name of your state? Illinois
My Mom, a widow, sold her house in May 2006, three days later she passed away. A week later, at the closing, we found out she had added my name to the title in 1993 after my Dad passed away.
They gave us two checks for the proceeds of the house, one in my name, and one in my Mom's name, with my name being the inheritor.
She had a will and left everything to me (I am her only child)
I have never resided in that house.

Will I have to pay taxes on my portion of the proceeds or on the entire portion or on any portion?
Thanks, JaneWhat is the name of your state?

Who closed on the house after the seller passed?

 

[janebauer]

Who closed on the house after the seller passed?

I closed on the house. I was the only one left and was her only heir.

If I am taxed on capital gains on my half, then should I also claim half of the cost basis?

 

[tranquility]

You shouldn't ask more questions until you answer the previous ones first. It can take things into assumption land.

But, by my GUESS as to what is going on, you will be taxed on the capital gain on your half using 1/2 of the basis (mom's basis, as it was a gift before death).

However, you wrote:

My Mom, a widow, sold her house in May 2006, three days later she passed away.

and:

I closed on the house.

How can this be? I would GUESS you only closed on 1/2 of the house. See a tax professional. The facts are starting to get muddy.

 

[janebauer]

You shouldn't ask more questions until you answer the previous ones first. It can take things into assumption land.

But, by my GUESS as to what is going on, you will be taxed on the capital gain on your half using 1/2 of the basis (mom's basis, as it was a gift before death).

However, you wrote:

and:


How can this be? I would GUESS you only closed on 1/2 of the house. See a tax professional. The facts are starting to get muddy.

Sorry, I have no idea what questions I did not answer.
My Mom and Dad owned a house, My Dad died and unbeknowst to me my Mom put me on the title as joint owner. She sold the house on a Sunday, died on Tues, and we closed on the house the following week. I just walked into the Title company and they gave me two checks, like I said previously. She bought the house in 1964 for $23,000. Sold it for $95,000, each check was in teh amount of $45,000, after commission. She probably spent $40,000 improvements over the years.

 

[tranquility]

This is a complex fact scenario. You need to determine how title was held, exactly. You also need to determine if there were any contingencies left in escrow (beyond the passing of time) at the time of death. What she probably spent is not that useful. What she provably spent is. You need to see a tax professional this year. You may also have a problem if anyone else claims the money (Unless you held title under right of survivorship--which would be good from a probate point of view but bad from a tax perspective.)