Legal Question in Real Estate Law in Virginia
Capital Gains
Hi, If two people are on a deed for a home and only one of them occupy the home (for atleast 2 years) are we still eligible to be exempt from capital gains. Here is the situation. I paid cash for a townhouse and my mother would like to pay me for half of the home and move in. She plans to live there for atleast two years. I would like to add her name to the deed because she will be half owner. Right now, I am the only name on the deed.
Will we have to pay capital gains when the home is sold because I am on the deed and do not live in the home. The total sale price would be no more than $150,000. Just to recap. I would like to add my mothers name to the deed of a home. She will occupy the home for atleast 2 years. I will not live in the home. When the home is sold would we be eligible for the capital gains exclusion. Thank you for your time. Regards, Robert
1 Answer from Attorneys
Re: Capital Gains
Under the circumstances which you've described, the home should not be considered "sold" but rather merely a
one half undivided interest in the whole property to your mother is being sold which allows her to become a co-owner as a tenant in common with you, and, consequently, the IRS rules pertaining to capital gains should not be applicable to this type of transaction.
Although you haven't ask for an opinion regarding this type of ownership arrangement, it is rarely a good idea for many different reasons.
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