Sale of Gifted House

Forum|Forum|3 years ago
January 13, 2023
3 replies
14 views

Never seen this before for hoping for some guidance.

Mom gifted daughter a house in in September 2021. The daughter was living in the house for 4 years when the house was gifted. In October of 2021 of same year, the daughter decided to sell the house for $220k.

Mom purchased the house in September 2017 for $157K

I know the daughter gets will show that basis date is 9/2017. Would this be considered sale of personal residence that the daughter lived in for 4 years? This is a strange one. Any guidance will be appreciated.

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Best answer by IRonMaN

You have to have owned and lived in the residence for 2 out of the 5 years for gain exclusion. Sounds like you only have met half of the equation

IRonMaNAnswer

Level 15

You have to have owned and lived in the residence for 2 out of the 5 years for gain exclusion. Sounds like you only have met half of the equation

Slava Ukraini!

BobKamman

Level 15

Obviously the mother didn't want to pay tax on the gain. She probably already had a buyer. Mothers who can afford to buy a house for their kid are usually in a higher tax bracket than the kid. The mother has escaped a higher tax, but the daughter isn't "home safe" since her mother didn't trust her to own the place for the last two years.

H

hankinstax

Level 5

I agree with Bob. The daughter must report gain on the home based on Mother's adjusted basis at the time of the gift. The daughter cannot sustain a reportable loss on the sale. The daughter is not eligible for "home sale exclusion".

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