Q: I sold my house in 2022. I had put my daughter name on the deed with mine when I bought it in 2014
is she responsible for any taxes on the house or can I claim it on my taxes. how does this work on your taxes. I bought the house and I received all the profits but my accountant said she may be responsible for 1/2. I am hoping to be responsible for it all.
A:
The tax implications of selling a house with multiple owners depend on several factors, including the ownership percentage of each owner and the length of time the property was owned. Here is some general information that may be helpful:
Ownership percentage: If the deed to the house was in both your and your daughter's names, then you both likely owned an equal percentage of the property. In that case, you would both be responsible for paying taxes on the gain from the sale of the property based on your respective ownership percentages.
Length of ownership: If you owned the property for more than one year before selling it, you may be eligible for long-term capital gains tax rates, which are generally lower than ordinary income tax rates. However, if you owned the property for one year or less, you may be subject to short-term capital gains tax rates.
Tax reporting: When you sell a house, you will need to report the sale on your tax return using IRS Form 1099-S. The form will show the total sales price of the property and your and your daughter's ownership percentages. You will need to calculate the gain or loss on the sale, which is the difference between the sales price and the adjusted basis of the property. Your accountant can help you determine the adjusted basis, which includes the original purchase price, any improvements you made to the property, and certain other expenses.
Based on this information, it is possible that your daughter may be responsible for paying taxes on 1/2 of the gain from the sale, depending on the ownership percentages and other factors. However, you should consult with your accountant or a tax professional to determine your specific tax liability and the best way to report the sale on your tax return.
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