Quote:
Originally Posted by Mike3600
My question is;; Does the $6,100.00 have to be claimed as any kind of income or capital gains, or, being that we donated the money back to her, are we exempt for the $6,100.00? |
As long as she sells her main home at a gain, and has lived in it for at least two years during the five-year period ending on the date of sale, she can exclude the gain from taxable income up to a maximum exclusion of $ $250K exclusion for a single person.So as long as it is her main home(her name was on the deed as she owned 1/2) co-owned with her siblings, then $6,100 is part of LTCG( as I assume that the selling price of the home exceeded its adj basis) and doesn’t need to report it on her return(on joint return with you) and she doesn’t need to file Form 709 on the money of $6,100 to her mother as $6100 is smaller than annual gift tax exclusion of $13K for 2013. However, if the home home in which she owned 1/2is NOT her main home , then she needs to report it on her return as LTCG taxed 15% if her marginal tax rate is 25% or higher.HOWEVER,as long as she and her siblings inherited it, then, generally, the value of inherited property is not considered income, so no tax would be due simply because of the inheritance, at least at the federal level.