how to figure basis when i was put on house with my dad as to figure if i have to pay capital gains when i sell

    0  Views: 357 Answers: 1 Posted: 12 years ago

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    You were "put" on the house with your dad.  This means you are now a joint owner or tenants in common with your dad.  I presume that you are 50/50 owner here with him although this fact is not important.  My understanding here is that when your dad acquired the house, the cost basis was triggered.  Over the years of ownership, you two might have added capital improvements (like a new bathroom instead of changing a faucet in it).  These capital improvements would be added to the original cost basis to make the basis higher.  When you do sell the house, you would focus on original cost + improvements. 

    Now, if you happen to rent the house for a period of time and have used depreciation on the property for tax purposes, then the depreciated amounts over the years would be SUBTRACTED from the original cost basis.

    Finally, if the sales price is more than the adjusted cost basis, you have taxable capital gain.  Likewise, if it's below the ACB, then you have a capital loss.

    I am sorry I cannot explain this in a more simple way. 



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