Posted on: 12th Nov, 2007 12:39 pm
property was acquired by quit claim with grantor having life use. the life use holder can no longer live alone and the house had to be sold. what is the capital gain implications cost basis, etc for the grantees?
Hi,
You are responsible to pay capital gains tax if the selling price exceeds the price of the property when it was quit claimed to you.
You are responsible to pay capital gains tax if the selling price exceeds the price of the property when it was quit claimed to you.
Hi bluesbyday,
The granter cannot sell the property without the grantee's signature although he has life estate on it. So if you as a grantee do not sign, the granter cannot sell the property.
If you give your consent to sell the property, you have to pay capital gain tax. It will be applicable if the selling price exceeds over the price of the property when it was quitclaimed to you.
Thanks,
Larry
The granter cannot sell the property without the grantee's signature although he has life estate on it. So if you as a grantee do not sign, the granter cannot sell the property.
If you give your consent to sell the property, you have to pay capital gain tax. It will be applicable if the selling price exceeds over the price of the property when it was quitclaimed to you.
Thanks,
Larry
Hello Bluesbyday,
I think both Michel and Larry are right.
If you sell the house at a price higher than what it was at the time of the quit claim, you have to pay capital gains tax.
You may also get a tax exemption if this house has been your primary residence for the past two years.
For further details on tax exemption you may look here http://www.mortgagefit.com/know-how/capitalgainstax.html#exemption
I think both Michel and Larry are right.
If you sell the house at a price higher than what it was at the time of the quit claim, you have to pay capital gains tax.
You may also get a tax exemption if this house has been your primary residence for the past two years.
For further details on tax exemption you may look here http://www.mortgagefit.com/know-how/capitalgainstax.html#exemption