Posted on: 04th Dec, 2007 09:13 pm
My adult daughter has been living in my second home for several years. We are now interested in selling the home and I am trying to find a way out of paying capital gains. Can I list her as a co-owner of the home and can we then sell the home without paying the capital gains? Thank you.
Honestly I'd consult with a tax professional on this, since it would be construed as legal advice.
Hello Deborah,
If you list her as the co-owner now, it will be her primary residence if she continues to live there. But to qualify for the capital gains tax exemption you have to occupy your primary house for a minimum of 2 years out of 5 years before the sale and in that case, I think your daughter has to continue living there for 2 more years after getting the ownership. The previous years will not be considered because at that time it was only your second home. I guess only after that you and your daughter will qualify for the capital gains tax exemption of $250,000 per person.
I think it will be better if you consult a tax advisor and take his help.
If you list her as the co-owner now, it will be her primary residence if she continues to live there. But to qualify for the capital gains tax exemption you have to occupy your primary house for a minimum of 2 years out of 5 years before the sale and in that case, I think your daughter has to continue living there for 2 more years after getting the ownership. The previous years will not be considered because at that time it was only your second home. I guess only after that you and your daughter will qualify for the capital gains tax exemption of $250,000 per person.
I think it will be better if you consult a tax advisor and take his help.
Welcome to the forum deborahlowrose,
I would advise, as did Shane and jenkin7, that you contact a tax professional.
As this was a second home for you, you may still have tax relief when you sell. If you were to add your daughter now and she not own the property for 2 years, you could very well make your tax situation worse by adding her.
I would advise, as did Shane and jenkin7, that you contact a tax professional.
As this was a second home for you, you may still have tax relief when you sell. If you were to add your daughter now and she not own the property for 2 years, you could very well make your tax situation worse by adding her.
