Sale of Inherited property

[Katedid1953]

My client is having her sister pay her NOW for her portion of the parent's home before their only living parent passes away. The sister is currently living in the parents home with the dad and wants to be able to have it solely. How do I handle the $6,000. down payment made in 2007. Interest is also being paid.

All suggestions greatly appreciated..

katedid1953

[jainen]

>>her portion of the parent's home<<

I'm always uncomfortable about this kind of thinking. She doesn't HAVE any portion, although perhaps she may in the future IF his final will says so and, of course, if she outlives her father. There are several legal issues that could end in a family fight, so I would suggest she talk to an estate attorney.

I suppose technically she might have taxable income for the sale of something like a quitclaim, but most preparers would say it looks more like a gift, even if it is calculated as an interest-bearing annuity.

[RoyDaleOne]

Sunday School Lesson: Jacob and Rebekah deceive Isaac into blessing Jacob rather than Esau.

While you may not agree with the foregoing, the lesson is clear --- do unto others as you would have others due unto you.

In God we trust, all others pay cash.

Family fight 101.....

[kcjenkins]

Well, since she is selling something that she does not actually own, it's not a sale, so how can it be income? No way that this makes economic sense, unless the father has 'given' both girls the house already? I think that you'd be foolish to give her tax advice until you read the legal documents behind this transaction. I'm hoping that they talked to an attorney, and had a contract of some sort drawn up, so that is where I'd start. People do some really weird things when it comes to inheritances, you want to avoid being a casualty of their family issues.

[Katedid1953]

I had a reply from my client...she said her 401k lady told her it was a seller sponsored sale....