My mom added us to her deed and then died. Do we owe taxes?


Q. My mother died this year and when my sister and I went to sell her home, we found out that without our knowledge, our mom had put us on the title as joint owners even though neither of us had put any money into the purchase of the home some 30 years ago. Are we now on the hook for taxes on the gain in house value?
— Still working

A. We’re sorry to hear about your mother.

Assuming she retained an interest in the house or lived in the house after putting your names on the deed, the IRS considers the property to be part of the taxable estate of your mother, said Shirley Whitenack, an estate planning attorney with Schenck, Price, Smith & King in Florham Park.

That means you would have received a “step up” in basis to the fair market value of the property on the date of death.

“Accordingly, the only gain that would be taxed to the children would be the difference between the fair market value of the property when their mother died and the net proceeds of the sale,” Whitenack said.

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This story was originally published on Feb. 18, 2021. presents certain general financial planning principles and advice, but should never be viewed as a substitute for obtaining advice from a personal professional advisor who understands your unique individual circumstances.