Second home paid off taxes ?
Hi! I have a home that I pay mortgage on and my parents are paying off their second home and transferring the title to my name which means I have two homes. How will that affect my taxes? Will I be paying more? Im married and work two jobs making a 6 figure salary. Can someone please give me details on how this will affect me and my taxes? Thank you!
- curtisports2Lv 76 months agoFavorite Answer
It won't affect your income tax until the tax year you sell it. At that time, you may or may not have a sizable income tax bill on the profit. Their cost basis, what they paid plus the cost of improvements they made while they owned it, will be your cost basis because they are giving it to you. You will want any and all records they have on the purchase and improvements they made. You need those for your records for if and when you sell it.
Your annual property tax bill will increase by the amount of property tax on the gifted home. You wil owe property tax on two homes.
You will also have the added expenses that come with owning a home, the maintenance of the grounds and updating and repairs to the house.
Your parents will be required to file a gift tax return. They will not PAY any tax now, and may never pay any tax. Lifetime gifts count against their lifetime estate exemption which is in the millions. But they must file that gift tax return.
- ?Lv 76 months ago
You will have to pay property taxes on two places and that is expensive and insurance.....
- SlickterpLv 76 months ago
You'll pay more property taxes. Zero effect on income taxes.
- Anonymous6 months ago
It won't affect your federal income tax if that's what you're referring to.
You will owe county property tax on the properties you own.
Your parents will need to file a gift tax return but they won't owe any gift tax. The amount they can bequeath upon their death tax-free will be reduced by the value of the gift.
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- A HunchLv 76 months ago
Your parents are gifting you the house.
Since it's worth more than $15000, your parents need to complete a gift tax form.
You don't pay taxes, your parents probably don't pay taxes (the tax due will likely be $0).
You are going to be responsible for any property taxes, but not income taxes.