Skip to main content
June 21, 2024
Question

My son owned my house for 6 years, and then returned it to me. Is he required to pay capital gains on sale?

  • June 21, 2024
  • 2 replies
  • 0 views
Are previous owners required to pay capital gains when a property is sold by new owner?

2 replies

M-MTax
June 21, 2024

Did he buy it from you and then sell it back to you or did you deed it to him and then he deeded it back to you without any payment or consideration?

June 21, 2024

@pocketsoflearnin let's assume you deeded it to him as a gift and now he deeded it back to you as a gift and there were no other considerations.  

 

There was no sale, so no capital gains tax. 

 

However,  your cost basis remains what you originally paid for it, so when  you sell it is when capital gain tax  would be due.  

 

Who is living in this home?  You wouldn't be eligible for the $250,000 (single) / $500,000 (joint) capital gain exclusion until you lived in it and owned it for two years into the future.  Even if you lived in it for the past 6 years, you did not own it, so not eligible for the exclusion.