I purchased my mothers N.J.home 3 yrs ago for $1. She lives with me and I care for her as she is 93 yrs old and bedridden. I have a sister whos name is not on the deed for reasons that no longer apply now. My mothers Will states each of her children shall get equal distribution of her estate. I plan on selling the house after my mother passes on to give my sister her fair share.
Is the $1 sale price considered a gift from my mother to me. If yes does she have to pay gift tax on the difference between her cost basis ( $200,000) and the fair value of the home? ($6000.00 ) = $400,000 ( I know she has to file the gift form but will she be liable for gift taxs?)
If I sell the home and gift 1/2 the selling price to my sister (300,000) will I have to pay gift tax?
Should I add my sisters name to the deed now as I understand the IRS does not search titles when the home is sold.
If yes then what would be her tax liability as she does not live in the house and could she also take the $250,000 credit I would get. Is there a better way to do this?
I originally posted in the wills and estates but was told to post this here.
Is the $1 sale price considered a gift from my mother to me. If yes does she have to pay gift tax on the difference between her cost basis ( $200,000) and the fair value of the home? ($6000.00 ) = $400,000 ( I know she has to file the gift form but will she be liable for gift taxs?)
If I sell the home and gift 1/2 the selling price to my sister (300,000) will I have to pay gift tax?
Should I add my sisters name to the deed now as I understand the IRS does not search titles when the home is sold.
If yes then what would be her tax liability as she does not live in the house and could she also take the $250,000 credit I would get. Is there a better way to do this?
I originally posted in the wills and estates but was told to post this here.