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Posted by Stuart A. Bronstein on April 9, 2007, 3:48 am
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> My mother filed a quitclaim deed to add me as a joint tenant
> on her house in 1996. She sold the house this year. She
> also turned over her cash to me this year. My wife and I
> are taking care of her now and she is living with us.
>
> I understand that I must file a form 709 on her 2007 return
> for the cash she turned over to me this year, and I must
> file a schedule D on my own 2007 return for the my share of
> the capitol gains on the sale of the house.
That's not necessarily correct.
> No Schedule D is required on her portion of the gains. My
> remaining question is this:
>
> When she declared me a joint tenant in 1996, was that
> technically a gift to me? She did not file a form 709 in
> 1996. If it was a gift, what is the best way to handle it
> now?
It depends. If the purpose was to put you on title as a
method to pass title if she died, then it wasn't a gift. If
she had died the entire value of the property would have
been included in her taxable estate for estate tax purposes
in any case.
If it wasn't a gift, you should not be taxable on any of the
profits of the sale. It would all be your mother's profit.
As far as the current transfer of cash, what was it's
purpose? Can you do whatever you want with the money? Or
do you have it so you can manage it for your mother? Do you
keep it in a separate account or mix it with your other
money?
If you are holding the money for your mother's benefit it's
not really yours - you hold it in trust for your mother.
She is still considered the legal owner, and taxed on all
income (interest, dividends, etc.) from that money. And it
wasn't a gift to you.
Stu
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