My sister and I are owners of my mom’s house. My mom wants to sell her house. Do we pay taxes on the sell even if we turn around and buy her a house? Can we quit-claim it soon to avoid this?
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My sister and I are owners of my mom’s house. My mom wants to sell her house. Do we pay taxes on the sell even if we turn around and buy her a house? Can we quit-claim it soon to avoid this?
Asked on February 23, 2012 under Real Estate Law, Alabama
Answers:
FreeAdvice Contributing Attorney / FreeAdvice Contributing Attorney
Answered 12 years ago | Contributor
The best way to get answers to your question is to consult with a real estate attorney. One way to avoid possible taxes is to do some form of a tax free exchange if you sell the home you have and buy a home having the same or greater sales price as the one sold.
You have to designate replacement property in a certain period of time (Starker or a reverse Starker transaction) and you have to have a straw person holding the sales proceeds of your home to make the deal fly. The above suggestion is somewhat complicated. That is why you need to consult with a real estate or a tax attorney.
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