A capital gain (CG) on the sale of a house question.
My wife's father transferred ownership of his home in upstate New York to his daughter (my wife) and his granddaughter (my wife's niece). He now resides in FL as does my wife. His granddaughter still resides in NY. He had life use of it when he was in NY (he was a FL/NY snowbird). However, it was recently sold for $30,000. I realize my wife and her niece paid nothing for the house, I realize it is not her (our) or her niece's primary residence. However, my wife and her nice also did not receive one cent of income from it either. That is, it was not an investment property. It seems like this is an in between case of being a primary residence and being an investment property. It simply changed ownership hands and then was sold. Anyways, my question is:
Does my wife (and of course her niece) have to pay CG's on their respective halves of the sale proceeds?
1 Answer from Attorneys
No, it's not an 'in between' case. The exclusion of capital gain on a sale of a home applies to personal residences, of which this was not. Game, set, match.
However I don't think you should give up so easily as far as alternative reporting opportunities where gain can be reduced or eliminated.
Good luck.
Rick Bryan, Esq.
New York, NY
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