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<p>Why is the mother on title if she didn't contribute any funds?
Was she just co-signing on a loan or something? If so, couldn't
it be argued her ownership interest is nominal?</p>
<p>Also it's unclear a bit because you started by referring to
parents and then only to the mother. Are the mother and father's
situations identical?<br>
</p>
<p>I would agree with the need to consult a tax attorney, both to
resolve any gift tax issues and any gain on sale issues. But if
the parents' interest can be seen as just a nominal interest with
minimal tax consequences of any type, then it might be worth
clearing up before selling so the escrow doesn't face these
issues. If escrow handles the deed I would assume they issue a
1099 to the all the grantors (which is an assumed answer to one of
your questions--I'm not certain).<br>
</p>
<pre class="moz-signature" cols="72">Kary L. Krismer
206 723-2148</pre>
<div class="moz-cite-prefix">On 4/10/2021 12:24 PM, Douglas Scott
wrote:<br>
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<div dir="ltr">Thanks for your thoughts. The mother did not
contribute any funds or receive any income from this rental
property which is in the mothers name.They now want to sell it.
Mother doesn't want to gift it to the daughter because that
subtracts from her exemption as a gift. Mother does not want any
tax liability. Since the 1099s go to all owners and the mother
is the only owner she would have the entire liability. Could a
trust of some kind be created with the daughter as a
beneficiary? <br clear="all">
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<div dir="ltr" class="gmail_attr">On Sat, Apr 10, 2021 at 11:49
AM John J. Sullivan <<a href="mailto:sullaw@comcast.net"
moz-do-not-send="true">sullaw@comcast.net</a>> wrote:<br>
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<blockquote class="gmail_quote" style="margin:0px 0px 0px
0.8ex;border-left:1px solid rgb(204,204,204);padding-left:1ex">
<div dir="auto">Doug:
<div><br>
</div>
<div>I haven’t been able to definitively research this.
Somewhat surprisingly a quick answer did not pop up. </div>
<div><br>
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<div>Here’s my two cents worth as a tax attorney. </div>
<div><br>
</div>
<div>Did the parents help with the down payment or mortgage
or other expenses? They are presumed to own 50/50 unless
otherwise established. </div>
<div><br>
</div>
<div>On sale, the daughter may be eligible for the gain
exclusion on the sale of a primary residence, assuming she
qualifies under the ownership and residence tests. The
parents’ capital gain is on investment property, assuming
no treatment as a rental. They probably report on their
separate returns and a 1099 goes to all owners. </div>
<div><br>
</div>
<div>I would be careful about a pre-sale gift. That would
mean the daughter would recognize 100% of the gain. Does
it exceed her $250K exemption? Also, I am not sure she
would qualify for it on the gifted portion because she has
neither owned nor resides in that portion long enough. </div>
<div><br>
</div>
<div>I would suggest they consult a tax attorney/CPA. And
consider either having the daughter make a gift of the tax
the sale adds to the parents return, or, if they don’t
want the gain on sale, they can gift their share of the
gain net of the taxes. </div>
<div><br>
</div>
<div>Just an early Saturday morning first draft of an
analysis without thorough research. </div>
<div><br>
</div>
<div>John J. Sullivan</div>
<div><br>
<div dir="ltr">Sent from my iPhone</div>
<div dir="ltr"><br>
<blockquote type="cite">On Apr 10, 2021, at 10:52 AM,
Kaitlyn Jackson <<a
href="mailto:kaitlyn@dimensionlaw.com"
target="_blank" moz-do-not-send="true">kaitlyn@dimensionlaw.com</a>>
wrote:<br>
<br>
</blockquote>
</div>
<blockquote type="cite">
<div dir="ltr">Cant the parents just quit claim deed
the house to the daughter as a gift? <br>
<br>
<div dir="ltr">Sent from my iPhone</div>
<div dir="ltr"><br>
<blockquote type="cite">On Apr 9, 2021, at 11:14 AM,
Douglas Scott <<a
href="mailto:doug@rainieradvocates.com"
target="_blank" moz-do-not-send="true">doug@rainieradvocates.com</a>>
wrote:<br>
<br>
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<blockquote type="cite">
<div dir="ltr">
<div dir="ltr">Parents buy a house for their
daughter. All 3 are on title, but parents want
nothing to do with the house. Upon the sale of
the house the parents don't want any tax
liability. How do the parents avoid this and
which one of them (or all) get the 1099S? Is it
whoever gets the payment?
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