I just recently paid off my mother's condo which was a Reverse Mortgage. How do I record the deed without incurring too much taxes?

Asked by Dora, Walpole, MA Fri Jun 10, 2011

I just recently bought my mother's condo which is in California. It was a reverse mortgage through HUD and Bank of America. I want to know how to record the deed and what the ramifications are to my mother and to myself in the future when I want to sell the home. Ten years ago it was worth $350,000, today it is worth $85,000. I paid $60,000.

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Steve_hawkin…, Home Buyer, New York, NY
Mon May 20, 2013
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Clark Riel, Agent, Reno, NV
Fri Jun 10, 2011
I am not a tax professional and I suggest you talk to one, but if I understand this correctly and you bought your mother's home which see lived in and if she claimed it as her primary residence for 2 of the past 5 years there would be no tax consequence on her part up to $250,000 or $500,000 if she files jointly. You bought it for $60,000 so I am assuming that covered her note on the reverse mortgage. You on the other hand, unless you bought it as your primary residence may have tax consequences in the future. If it is your primary residence and the tax laws stay the same concerning capital gains then you would have the same tax relief when you sell. If the property is an investment then you can defer your taxes owed by doing a like exchange when you sell.
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