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  1. #1
    Join Date
    Dec 2017

    Default Do I Have to Pay Federal Taxes Based on Gross Sale of House Quit Claimed to Me

    My mother quit claimed her home to me two years ago and mortgage stayed in her name. My mother paid for the mortgage monthly. I sold the home this year because she moved in with me. I received a 1099 for the gross amount of the sale of the home. Will I be able to only pay taxes on the net (after mortgage was paid off from the sale of the home)?

    Thanks for any help!

  2. #2
    Join Date
    Oct 2014

    Default Re: Do I Have to Pay Federal Taxes Off of Gross Sale of House Quit Claimed to Me

    You will include in income the difference between the net sales proceeds (gross sales less deductible costs of sale) and your adjusted basis the property. Your adjusted basis is the basis your mother had in it on the day she gave it to you and then increased by any improvements you made to the property (routine repairs do not increase basis however) and decreased by any depreciation you took on the property or that you could have taken. The amount of the mortgage left when you sell is completely irrelevant to the computation of the gain. For more information on this, see IRS Publication 544 on sales of assets and Publication 551 on basis.

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