Sold Land That Was Gifted To Us

[tylor]

s About Taxes)/sold land that was gifted to us Advertisement Expert: Helen P. O`Planick, EA - 10/1/2006 Helen,  Thanks for the answer.  One more question.....She owned the land for many years[back in the 70's] but it was just recently[2mos back put in our names so that she could qualify for medicaid[her husband died and she was left with much debt with his funeral and plot].  Does this mean we will have to pay more then 15%?          Thanks , Lynn

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Followup To

- My husband and I and his sister inlaw and husband just jointly sold 2 lots that where gifted to us by my mother inlaw. The property was sold for 8000.00 and we both received a 1099s for 4,000,00.  The land was gifted to us  and we are giving my mother inlaw the money back from the sale so she can pay off her debt. I am shocked that we have to pay taxes on this or do we?  The closing was a few days ago and I need the information before the lawyer sends off the 1099s info.      Sincerely Lynn

[I can't afford to pay any more taxes this year]

[achban]

- You will owe taxes on this money.  How much did your MIL pay for this land?  That is your basis.  The difference btwn the sales price and basis is taxable.  Hopefully she and you combined owned it longer than a year, so your federal tax rate is 15%.

It does not matter if you get the info now or before the 1099S is mailed, YOU sold the property and YOU will owe the tax.  Subtract the taxes owed before you gift the money back to your MIL.

Helen, EA in PA

[Ayrwode]

Federally, 15% is your max tax rate.

What worries me is that it sounds like she may be committing medicaid fraud.  And this could be very serious. She needs to speak to someone who knows about HER state laws and NOW.  

This is a hot spot right now and she does not want the hassle.

Helen, EA in PA