Posted on: 15th Apr, 2010 12:10 pm
My grandfather drew up and signed a warranty deed with life estate with an attorney for his Iowa home in 2001. However, it has not yet been recorded with the state.
He now lives in a nursing home and we all wish to sell the house. I am signing a warranty deed to transfer claims to the new buyer and grandfather is signing a deed to transfer his remaining claim also.
The question is: who receives the proceeds from the sale? Me or him? Can the sale of the house be income tax exempted under his name? If I receive proceeds is it long-term capital gain or a gift? Can the proceeds be evenly split between us?
He now lives in a nursing home and we all wish to sell the house. I am signing a warranty deed to transfer claims to the new buyer and grandfather is signing a deed to transfer his remaining claim also.
The question is: who receives the proceeds from the sale? Me or him? Can the sale of the house be income tax exempted under his name? If I receive proceeds is it long-term capital gain or a gift? Can the proceeds be evenly split between us?
Hi wildflyer!
Welcome to forums!
As far as I know unless you record the deed at the county recorder's office, it'll not be considered as valid. Thus, in my opinion, it is your grandfather who would receive the sale proceeds. I don't think the sale proceeds would be income tax exempted. He would be liable for paying the capital gains taxes depending upon the profit he makes from the sale of the property. If you receive the payments, then you would be liable for paying the capital gains taxes. For further advice in this regard, I would suggest you to contact a real estate attorney and take his opinion.
Sussane
Welcome to forums!
As far as I know unless you record the deed at the county recorder's office, it'll not be considered as valid. Thus, in my opinion, it is your grandfather who would receive the sale proceeds. I don't think the sale proceeds would be income tax exempted. He would be liable for paying the capital gains taxes depending upon the profit he makes from the sale of the property. If you receive the payments, then you would be liable for paying the capital gains taxes. For further advice in this regard, I would suggest you to contact a real estate attorney and take his opinion.
Sussane