cred65 Posted March 5, 2008 Report Posted March 5, 2008 TP and sister owned vacation home (50% each) for several years. Client sold her 50% interest to sister at FMV which resulted in a profit. This was handled by an attorney. In previous years the TP itemized the 50% portion of mortgage interest on Sch A. Suggestions on how this is reported. Quote
lbbwest Posted March 5, 2008 Report Posted March 5, 2008 TP and sister owned vacation home (50% each) for several years. Client sold her 50% interest to sister at FMV which resulted in a profit. This was handled by an attorney. In previous years the TP itemized the 50% portion of mortgage interest on Sch A. Suggestions on how this is reported. If it was never rented out, depreciated etc. it simply is a normal capital gain on Schedule D, am I missing something? E.G. Total Purchase Price $200K each sibling paid $100K improvements $20K each sibling paid $10K your client's basis = $110K sale to sibling GAIN taxed at purchase price minus basis (difference from FMV and sale price = gift) Any loss NOT deductible on Schedule D because of related party rules. lbb Quote
Recommended Posts
Join the conversation
You can post now and register later. If you have an account, sign in now to post with your account.