Real Estate Sale Question?

So recently my mother did a flip, but to ensure borrowing power I had been asked to sign my name on to the deed. Now I didn't really do anything, just more so helped here and there with paperwork. 

Now my issue is that when the house was sold I signed off on the papers because I was on the deed, however none of the money or proceeds from the sale went to me, but all to my mother and the check was in her name as well. 

I have recently been sent home a tax paper that says I made a profit from the sale, but I did not. 

I am also independent from my mother in terms of taxes so this is a bigger issue than it may seem. Is there anyway to get this corrected?

Any help or advice would be appreciated.

5 Answers

  • 8 months ago

    Contrary to many of the answers, if you got a 1099-S, the IRS is going to pin that to your tax return regardless of how many fluffy letters you write or how emphatically you point to your mother. All those answers are going to get an immediate response of "Who Cares?" from the IRS.

    As far as the IRS is concerned, whether your mother reports it or how she reports it is irrelevant to your tax return.

    Get assistance from a professional tax preparer. You already did a stupid thing by co-buying the house. Don't multiply the mistake by asking a bunch of clueless Yahoo wanna-be tax professionals for their terrible advice.

    This can be straightened out by how you report it on your return (forget about pointing at someone else's return). If you take advice from someone on this board, it's going to haunt you for years.

  • 8 months ago

    When the house was sold the closing agent reported you and your mother as receiving the income of the sale, since your name was on the deed.  So the IRS is essentially fishing for where the income went and did you get any of it that you now owe to them.

    The first, really important question is, did your mother report on her income taxes as receiving all the income or did she report as receiving part of the income?  Maybe she reported everything correctly and they just need to review her return a bit better or maybe not.

    Anyhow, I would call the IRS, and follow up with a letter, and simply explain that you put no money into the deal and got no money out and you were only on the deed as the bank required your income to make the loan and so your tax return is correct.

    They can then go figure it all out from your mothers return but this sort of thing happens all the time (ie adding you to the deed to guarantee the mortgage) and if your mother did under report her income then they can go after her for the money.

  • 8 months ago would write a letter explaining the situation and attach it to your 2019 tax return. It would be smart to have a CPA or an Enrolled Agent to prepare your return and write the letter.

  • 8 months ago

    Contact the closing agent and get a copy of the check payable to your mother along with the closing statement.  This will show you made no income.

  • What do you think of the answers? You can sign in to give your opinion on the answer.
  • 8 months ago

    Your mother would claim all of the profit and thus the taxes would be paid. Done.

Still have questions? Get answers by asking now.