How To Report On Taxes
Over the summer I purchased a house with a hard money lender and once the rehab was completed I was not able to re-finance because of credit issues. Therefore, I sold the house to my mom and were in the process of having it quit claimed back to me. I'm renting the property out. How, should this be reported on my taxes?
I am assuming that there was no profit when you sold to your mom and that she is not selling to you, but just giving you the deed free and clear.
In effect, your mom just gave you the money to pay off your hard money loan. This is not reportable income to you, but may require your mom to file a Gift Tax Return for the amount she gave you that is over $11K.
I know this is not a satisfactory answer and that there are more issues involved depending upon the timing of the transfers and whether your mom expects you to repay her. A competent tax advisor needs to review the specific circumstances and all the details of this set of transactions before rendering an informed assessment of your tax treatment and that of your mother.
[ Edited by NewKidinTown2 on Date 01/15/2005 ]