[rene2008]

Mom wants to gift me,daughter,her home as I am disabeled on SS for 8 yrs with $1000 a month income. MOm has not lived in empty home for 1 yr and 8 months due to being in a nursing home.

I haven't lived in her home in 10 yrs and want to stay in my apartment and will not live in the home ever.

Was planning on renting out the house when its transferred to me as market is so bad. Just found out about Cap tax gain.

If I sell the home in a couple of years I have to pay 25% capital gain tax? The home may in a couple of yrs go to $250,000 but maybe selling it in my moms name now and have her trans money as tax gain is so high.

Mom can't rent home as she is on medi-cal and can't have an income.

Question 1 If my income would be $11,000 Social security and if rented home for $1000 a month would I have to pay 25% if I sold the home in a few yrs for $250,000?

Question 2 If I was added to the deed I would have to give the nursing home 1/2 of the income from the house if we rented it out per medi cal. If mom died and just me and her were on the deed, would I have to pay a cap tax gain as I haven't lived in the home? She hasn't lived in the home for 1 yr 8 mo and has almost died 3 times in the past yr.
Thanks

[MukatA]

Do not hurry with the gift. First, understand all the implications
1. If you sell the house before it is gifted to you, then your mom may be able to exclude gain of up to $250,000 if she meets the ownership and use test. Then mom can gift you the money. She will have to file gift tax return but will not owe any taxes.
Read about Main home sale: Your U.S. Tax Return: Profit From the Sale of Your Home

2. If mom gifts you the home, then you must know the fair market value of the home at the date of the gift and your mom's basis of the home. Your mom must file gift tax return but she will not owe any taxes as there is a life time exemption of $1 million of gifts.
Read about gifts and gift tax Your U.S. Tax Return: The U.S. Gift Tax

3. Now when you sell the house, you will have profit, which is your taxable income.

4. Your mom does not gift you the house but rites in the will that the house goes to you. In that case your cost basis of the house will be the fair market value at the date of her death (and not your mom's cost basis). When you sell the house, even after one day, it will be long term gain.
For more information on inheritance, read: Your U.S. Tax Return: Tax on Inheritances

[AtlantaTaxExpert]

Rene:

You and your mother need to speak with an tax professional with experience in both estate planning and the gift tax.

MukatA's advice is solid, but there are other considerations as well, too many to cover here.

[rene2008]

Mukata and Atlanta, Wow there is a lot to this. I'm glad for learning not to trans it to me and then sell it. Got a lot to think about and read the info on IRS.gov too.

Thanks so much for your help!

Rene

[AtlantaTaxExpert]

Glad to help!