Message Font: Serif | Sans-Serif
 
UnThreaded | Threaded | Whole Thread (6) | Ignore Thread Prev | Next
Author: TMFExRO Big red star, 1000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 121061  
Subject: Re: tax liability on sale of investment property Date: 10/10/2000 7:08 PM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 1
If Shane's share of the house, which was 10%, is the result of putting $3600 into the house whose purchase price was $125,000, then perhaps there is something in the Deed that says Shane is a 10% owner, with uncle and dad having other percentages listed. Perhaps I am misreading things and $3600 is what Shane contributed in cash to the fix-up. But I observe 10% of $125,000 is $12,500.

True, but if there was a mortgage, a 10% share wouldn't necessarily have cost $12,500. A $125,000 house with a $100,000 mortgage would have cost only $2,500 for an initial 10% buy-in, plus his share of improvements and mortgage payments. Regardless, for tax purposes his basis is going to be what he put into it.

So here's my question: despite whatever money Shane may have put in, either in the purchase price or contributions to the repairs, is his share of the capital gain 10% if that is his ownership percentage on the Deed?

The capital gain is figured by owner, not by property. Thus, his gain will be his share of the proceeds minus his basis.

As a secondary question, if no percentages are listed on the Deed and the property was held either as joint tenancy or tenancy in common, is Shane held to have had 1/3 of the gain?

This is a property, not a tax, law question, and the answer would depend on state law.

TMF ExRO
Phil Marti

Helping breathe life into dead horses since 1912
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Print the post  
UnThreaded | Threaded | Whole Thread (6) | Ignore Thread Prev | Next

Announcements

Disclaimer:
In accordance with IRS Circular 230, you cannot use the contents of any post on The Motley Fool's message boards to avoid tax-related penalties under the Internal Revenue Code or applicable state or local tax law provisions.
Post of the Day:
Value Hounds

Medallion Financial: TAXI!
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Community Home
Speak Your Mind, Start Your Blog, Rate Your Stocks

Community Team Fools - who are those TMF's?
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and "#1 Media Company to Work For" (BusinessInsider 2011)! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.
Advertisement