Summary: A sibling bought a home for her sister when she was going through a divorce and is now ready to sell it back to her. She should be able to sell her the house for what she paid plus costs, but a real estate attorney will help work out this deal.
Q: My sister was getting a divorce and between jobs so was not in a position to purchase a home in the city where she was relocating to. To help her out, I secured a mortgage and purchased the home, which cost $155,000.
My sister provided the down payment of $55,000 and makes the monthly mortgage payment (which includes insurance and taxes).
I'd like to sell the house to my sister now that she has a job and her divorce is final. Assuming she won't have any problems securing a mortgage on her own, what are the tax implications when I do sell the property to her? I'm not particularly concerned about realizing a profit or a loss on the sale for tax purposes. Any guidance would be appreciated.
A: It's clear that you and your sister have a great deal of trust between you -- she put down $55,000 on the property but wasn't listed on title or on the mortgage. That's nice to see. I'm sure you've been a big support to her as she's dealt with this upheaval in her life.
The good news is you should be able to sell her the house for what you paid plus costs, such as any title or transfer taxes required.
Since you won't show a profit on the home, you shouldn't have any tax issues. Please hire a real "selling" your sister her home.
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(View All Topics)consumer advice credit estate planning home buying ilyce glink mortgage mortgage lenders mortgage loan personal finance advice real estate real estate advice real estate agent refinance mortgage selling taxes
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