AboutHelen P. O`Planick, EA Expertise I am a tax professional, with experience in individual taxation. I would prefer not to answer questions about non-resident aliens or corporate taxation. Please do not ask me state related questions, unless the state is Pennsylvania. There are 42 taxing states and 42 TOTALLY different sets of state tax law.
Experience I have been preparing tax returns almost all my life. I have been in professional practice for 25 years and I am enrolled to practice before the Internal Revenue Service.
Organizations National Association of Enrolled Agents
Publications I am a prior Money Magazine Tax Test taker and have been quoted extensively in all media including monthly periodicals and books by tax authorities.
Question I am currently living with my parents and my parents would like to officially add my name to the Deed of the house so that I can receive homeowner tax breaks on my single salary income. I currently give them monthly rent but do not own any property. I was told that I need to fill out a new Grant Deed or QuitClaim deed, preliminary change of ownership report and documentary transfer taxes. Since my parents will still remain owners and I will just be an addition, how do they go about adding my name without any real tax implications? Do they have to give part of the house as a percentage to me as a gift? Or can we just be 3 equal owners of the house? If they give ownership as a gift, what tax implications are there for me and/or my parents? When they want to sell the house in the future and I do not live in the house anymore, how does this affect my taxes?
Answer You are being given a gift, 1/3 of their basis in the home. And if it is sold and if it is not your principal residence, you will owe taxes. Your parents will have to file a gift tax return.
As for homeowner tax breaks, federally, unless you are paying the mortgage, etc, you have NO tax breaks. State-wise, you need to check locally, you may or may be entitled to any breaks.
And - you did not ask - but if you are paying rent to the parents, they should be claiming it as such.
