Who pays capital gains tax?

[Torellian]

What is the name of your state (only U.S. law)? WI

If 2 people own a home as joint-tenants, but only one of those people live there, then I assume that only one person could count that home to be his primary residence and therefore that person wouldn't have to pay capital gains taxes on it if he were to sell.

As for the other person--do they have to pay capital gains tax when the house is sold? (Keeping in mind that they never lived in the house. That person's name is on the title as a joint-tenant to protect their interest in a private loan if the other person became deceased prior to payback of the entire loan).

 

[justalayman]

whomever realizes a capital gain and is not shielded by an exemption has to pay capital gains on what ever they realized.

So, if this is not your primary residence and as such are not shielded from paying capital gains tax on the property, then you will owe capital gains. It is essentially an investment as far as you are concerned.

 

[Torellian]

whomever realizes a capital gain and is not shielded by an exemption has to pay capital gains on what ever they realized.

So, if this is not your primary residence and as such are not shielded from paying capital gains tax on the property, then you will owe capital gains. It is essentially an investment as far as you are concerned.

Well, I'm actually the person who lives there, so I guess then I don't have anything to worry about that way. The other person is my Dad. He's the one who doesn't live there. He paid for most of the house as a loan to me with the agreement that I pay him back in monthly installments. Now that the loan is completely paid off, we are debating if the best thing to do is take his name off the title, or leave it on. I've run into alot of complications trying to figure out the best way to take it off, but now I've just recently heard about the fact that if we left his name on the title, he'd be liable for capital gains taxes when I sell the house.

The loan wasn't recorded. It was just a private agreement between me and Dad, but we wrote up a promissory note that we both signed, and he gave me receipts for each of my payments. Would these do anything to help him avoid any kinds of capital gains taxes if we left his name of the title? Also, would they help me to avoid the same if he Quit Claimed his half to me?

 

[justalayman]

you really should talk to a tax consultant. There are other taxes to consider as well and only a person that has access to both of your financial portfolios can make an accurate recommendation.