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How much taxes will i owed if I sell the house my mom lived in?

San Francisco, CA |

I refinanced my mom's house about 8 years ago , and have been on deed / loan of the house throughout these years . My mom was only on the deed , and she had been paying the mortgage . She died in November 2012 . We had refinanced and taken money out of the property several times threw out the years . An identical house across the street sold about a month ago for $ 256 , 000 . . . I owe only $ 204 , 000 on my mom's house . If I decide to sell how do I calculate the taxes owed ? This is not my primary home , but it was about 5 years ago . I've never put it as a rental since my mom was the one who lived in it recently . And I have a high income and made over 250K in 2012 . . . thanks .

Attorney Answers 3


  1. There are several options before you sell. First, you need to meet with a CPA. If you don't have one, you need one now. as a high income earner. Unfortunately, this is a tough time to call them until April 15th. Gather up your information including when you took title in your name with your mother, how you took title, should be ready to discuss. Bring your mother's will/trust, a copy of your title. This may require a tax attorney, but talk to your CPA first. Then figure out your Tax and Estate Planning. This might be a two part question 1) What are the tax ramifications on the sale ; and 2) Are there any legal instruments that can be arranged to protect you from both Tax and Estate Liability. Sorry for your loss and good luck. If you wish to discuss some referrals for a CPA, feel free to call and we can give you 2 or 3 good ones. But, they mostly practice in Southern California.

    Tim Broussard, Esq
    949-261-7700
    tbroussard@kringandchung.com

    This email does not create an Attorney-Client relationship.


  2. As a high income earner it is important that you retain a tax attorney now to minimize taxes on the future sale of a home. You will also need some estate planning before the sale to put you in a good tax position once you receive the proceeds from the sale. There are a few options available to minimize taxes depending on your current financial picture. If you hire a tax attorney you will get attorney client privilege which will allow you the opportunity to fully disclose your entire financial picture. If you were ever audited you don't want the IRS to be able to request all the documents that you gave your CPA. With a tax attorney you can have full and frank communications. I have a secure client portal where you can send me the documents involved. I will review the documents and give you a few options. You can sign up via http://www.jamestaxlaw.com/tax-advice.

    My comments are NOT LEGAL ADVICE. They are for informational purposes only. Actual legal advice can only be provided after you have signed an engagement letter. Answering this question does not create an attorney client relationship. Remember that without attorney client privilege you could possibly divulge information that can hurt your legal rights in the future. I am a tax attorney in Miami Florida. I can help you with your federal tax issues via a secure client portal if required.


  3. The amount of debt on the property has nothing to do with capital gains. Your question re: gains will depend on title/contribution to the property. To the extent the property is included in your mother's estate, it should receive a "step up" in basis to fair market value as of Nov. 2012. Gains would be calculated based on that amount. However, your question is confusing with respect to this issue. Additionally, there are some issues with sale it sounds like, particularly whose name(s) is/are on the deed right now and whether any administration needs to be done. Speaking to a tax/estate planning attorney would be beneficial to you.

    THESE COMMENTS ARE NOT LEGAL ADVICE. They are provided for informational purposes only. Actual legal advice can only be provided after consultation by an attorney licensed in your jurisdiction. The answer to question does not create an attorney-client relationship or otherwise require further consultation. Mrs. Cook is licensed to practice law throughout the state of California with offices in San Diego County. She is authorized to handle IRS matters throughout the United States, and is also licensed to practice before the United States Tax Court. IRS CIRCULAR 230 DISCLOSURE: To ensure compliance with requirements imposed by the IRS, please be advised that any U.S. federal tax advice contained in this communication (including any attachments) is not intended or written to be used or relied upon, and cannot be used or relied upon, for the purpose of (i) avoiding penalties under the Internal Revenue Code, or (ii) promoting, marketing or recommending to another party any transaction or matter addressed herein.

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