Legal Question in Real Estate Law in Florida

Re: Adding Child's Name to Condo Deed

I can see why you are confused, as a number of things are going on at the same time.

First as to the gift tax, or more appropriately a gift tax return, form 709, if the value which she gave to you, probably one half of the value of the condo at the time of the gift (when she added you to the deed) was in excess of 10k-11k (depending on the year in which this was done) then a gift tax return should have been filed. This would generally not require a payment of cash to the IRS, but would reduce the amount she could pass on estate tax free upon her death by the amount of the gift.

The real problem, though, is when you sell the property (I assume from your question that your mother has now died). Because you were added to the deed during her lifetime, your tax basis in the property is her tax basis. You did not get a stepped up basis in the property. That means if she paid 10k for the property, and you sell it for 200k, you now have a capital gain which is taxable in the amount of 190k. Had you inherited the property upon her death, your tax basis would have been the 200k in this example, and you would not have any income tax liability upon the sale.

Adding you to the deed prior to her death sounds like it saved you a few pennies in the probate process, but could have cost you many dollars upon the sale of the property.

If you have any other questions, I would be happy to attempt to assist you.