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Author: wmaddox Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 121585  
Subject: Tax consequences of selling gifts Date: 2/21/2000 7:13 PM
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Wife was given property by sister. Property was transferred into sisters name by mother. Sister gave undivided interest to brothers and sisters. Wife sold her part back to sister for 10k. A quit claim deed was filed. What are tax consequences of selling property.

Thanks,
Will
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Author: TMFTaxes Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 29694 of 121585
Subject: Re: Tax consequences of selling gifts Date: 2/23/2000 9:36 AM
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<<Wife was given property by sister.>>

Ok...sister made a gift to wife. Wife generally retains the same basis and holding period in the asset as sister (assuming the property has increased in value).

<< Property was transferred into sisters name by mother.>>

Depends upon what you mean by "transferred". Likely a gift from mother to sister. Again, sister would retain the same basis and holding period as mother. So, at this point, wife's basis is likely that of mother's original basis and holding period.

<< Sister gave undivided interest to brothers and sisters.>>

Right...but isn't that the same as your opening statement where "wife was given property by sister"? If so, the answer is the same.


<< Wife sold her part back to sister for 10k.>>

Assuming that $10k was the actual FMV of the property, then wife has a valid sale (assuming that there was a profit on the sale. It the property was sold at a loss, the rules are different again).

<<What are tax consequences of selling property.>>

If you have a gain, you report the gain and pay the tax. If you have a loss, you report the loss. If you have a loss when selling property to a "related" party, the rules get complicated, and the loss could be disallowed.

TMF Taxes
Roy



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