Cap Gains

[jckerr11]

Mom gave her son her home for free in 2018. Mom lived in house for 15 years. Son sold the house for $250,000 in 2019. Is there cap gains? What is sons basis?

[IRonMaN · Accepted solution]

Son's basis is equal to whatever mom's basis was plus any improvements he might have made.

[abctax55 · Accepted solution]

I'd do a bit of research on "life estate", using ALL of the info/facts you have on the situation to determine the basis.

[Camp1040 · Accepted solution]

If it is a life estate and the mom is still alive, then much research is required as you noted. If it is a life estate and mom died before the sale,then the remainder man of the life estate would get a stepped up basis. 

[Accountant-Man · Accepted solution]

When did mom stop living in the house?

[jckerr11]

Mom moved out in June of 2018 and the house was sold in October of 2019

[IRonMaN]

So mom moved out and upon doing so gave the house to son?  You then have potential capital gains based on selling price less mom's basis, closing costs, and any money son put into the house.

[rbynaker]

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@IRonMaN wrote:

So mom moved out and upon doing so gave the house to son?  You then have potential capital gains based on selling price less mom's basis, closing costs, and any money son put into the house.

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I'm sure it'll be easy enough to get Mom's basis off of the Gift Tax Return she must have filed for 2018, right?