AboutJohn Stancil, CPA Expertise I can answer questions on personal income taxes, partnerships, and some corporate income taxes. I can deal with some state tax questions. Limited gift and estate tax questions. I am also familiar with ministerial and church tax reporting issues. I teach tax and accounting at a small church-related college. Sales taxes and property taxes are state and local issues so I am not likely be be able to give you an in depth answer on those types of taxes. I have maintained a part time tax practice for over 30 years. I am a member of the AICPA, National Association of Tax Professionals, and the Institute of Management Accountants.
Visit my website at www.johnstancilcpa.com.
Also visit my blog, www.thetaxdocspot.com.
Experience I hold a doctorate in Accounting, and four professional certifications: CPA, CMA, CFM, and CIA. I passed all certification examinations on the first attempt, and received honorable mention for my scores on the CIA exam. I write a monthly tax column for the local newspaper. I have prepared taxes for over 30 years.
Education/Credentials DBA University of Memphis
MBA University of Georgia
BS in Accounting Mars Hill College
Question My father died in 1984. In 1993 my mother removed my father and added myself and my brother on the quit claim deed. My mother died in 2007. The house is being sold now in 2009.The cost of the house when purchased in 1982 was 87k. In 2007 the FMV was 240K. Selling price today is 130K. How do I determine the tax liability for myself and my brother. Are we considered 1/3 owners and have to pay capital gains tax? Or do we have a loss because of the housing market prices today(Florida)?
Thanks
Answer Arnold,
Thanks for your question.
This gets rather complicated as you did not include all the detail I need, but I will make some assumptions.
I presume that when your father died, the house was co-owned by both your parents and your mother inherited his half.
If this is the case, her basis is one-half the original purchase price and one-half the FMV as of the date of your dad's death.
I am also assuming that, in 1993, she kept one-third and gave one-third to each of you. Since that was a gift, your basis in this portion is 1/3 of her basis.
I further assume that you and your brother inherited the remaining portion upon her death. If so, you have a split basis. Your original 1/3 remains the same, but the additional interest you inherited would have a basis of FMV as of the date of her death.
Depending on how all this basis calculation works out you will have a taxable/deductible gain or loss on the sale.
