AboutCarole Dunton Expertise Preparation of individual income tax returns including social security, pensions, lump sum distributions, sale of personal residence, stock and mutual fund sales, distributions from individual retirement accounts, moving expenses and itemized deductions.
General knowledge of schedule C for small sole proprietorships.
No experience in corporate, estate, partnership or large business returns.
Experience 9 years as tax preparer for major national firm.
Question Carole - In 1993, my father signed over ownership of his house to my two sisters and me, with the provision that he be able to live there as long as he wanted. (I believe it's called a Warranty Deed?) My father moved in to live with my younger sister in 2000, and has been there since. In 2001, my older sister died.
We are considering renting the house, and I need to know who the owner is. The county clerk says the owners are Carole (my deceased sister), Lester (my father) and others.
I'm trying to figure out who claims the rental income.
Answer Hi Mike,
If your father signed the property over to you and your sisters I don't know why the county clerk says your father is one of the owners.
As far as the IRS is concerned, the person who receives the income is the one who includes it on his/her tax return. There is no proof of ownership required in filing the Schedule E to report the income and claim the expenses. However, if mortgage interest is one of the expenses, that can only be claimed by someone who is required to make the mortgage payments. Also property taxes paid by someone who has no obligation to pay them are not deductible.
It sounds like you need an attorney to get the ownership straightened out. Obviously a deceased person doesn't own a portion of the property - perhaps her estate does. But I'm not an attorney so I really can't be of any help with the ownership issues.
