I purchased a house with my daughter four years ago for her to live in. It has been her principal residence, but I have not lived there. We recently sold the house, and the profits from the sale were split between us. My share was $9,150. I am giving the money to my daughter and her husband. We have not sold any other property in the past four years. Am I subject to capital gains tax on my portion of the sale?
Yes, your half of the proceeds are subject to capital gains, if there is a gain. Your daughter won’t be subject to the capital gains tax if she lived in the home as her primary residence in two out of the past five years.
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Answered by: Susan D. Jarvis, CPA, is a sole practitioner in Nazareth, Pa.