My husband an I bought a condo in MA in 2008. (we live in another state) Our adult son lived there at the condo as a primary residence all 5 years. We used it as a secondary residence. We added our son to the deed after purchase, but my husband and I had the mortgage. However our son paid the mortgage and taxes for the 5 years. Because my son had a roommate, we counted half of the property as income property on my husband's and my taxes and accounted for the income minus any depreciation and mortgage interest percentage etc.
We recently sold the condo. It is our intention to let the proceeds go to our son. What is unclear is how we are to treat capital gains. What is the basis that both we and our son must consider? Is it possible for our son to take all of the capital gains for this sale ? Can we "gift " only a portion of the property each year for him to develop a basis? I think my husband and I are liable for taxes on the amount we took in depreciation over the past five years as well.
I realize this is a little complex and have been trying to find a professional tax accountant to help us - so far to no avail. I would appreciate anyone pointing me in a direction to help find such a professional, or to help me find answers here. Thanks.
We recently sold the condo. It is our intention to let the proceeds go to our son. What is unclear is how we are to treat capital gains. What is the basis that both we and our son must consider? Is it possible for our son to take all of the capital gains for this sale ? Can we "gift " only a portion of the property each year for him to develop a basis? I think my husband and I are liable for taxes on the amount we took in depreciation over the past five years as well.
I realize this is a little complex and have been trying to find a professional tax accountant to help us - so far to no avail. I would appreciate anyone pointing me in a direction to help find such a professional, or to help me find answers here. Thanks.