Mortgage Fees to Avoid

DEAR BOB: In 1988 my husband and I bought a house together. In 1994 we divorced and I changed the title to my name. In February we got back together and remarried in May. I added his name back to the title. If we sell our home within a year and file our income tax returns jointly for 2006, can we claim the $500,000 home sale tax deduction? -- Rita R.

DEAR RITA: Not yet. For your husband to qualify for an additional $250,000 principal residence sale tax exemption, Internal Revenue Code 121 says he must occupy the principal residence at least 24 of the 60 months before its sale. However, he does not have to be on the title if he meets the 24-month principal residence occupancy test and you both file a joint income tax return in the year of principal residence sale. Consult a tax adviser for details.

DEAR BOB: I am interested in finding out who is buying the house next door to mine. The sale is pending. Is there any way to learn other than asking the buyers or realty agents directly? -- Carole B.

DEAR CAROLE: Until a home sale closes and the title transfer is recorded, the real estate agents and the other parties handling the transfer cannot legally disclose who is buying the house. Nor can they reveal the purchase price without breaching their fiduciary duty to the seller and buyer. The only way to find out the buyer's name now is to ask the seller, but that individual doesn't have to disclose the buyer's name.

DEAR BOB: I feel the sellers from whom I bought my home did not disclose a material and expensive problem with the house. The neighbors tell me the previous owners tried extensive repairs over the years to remedy the problem but did not succeed. Is there any way I can learn the disclosures the sellers of my house were given when they purchased? -- Diane S.

DEAR DIANE: You have no legal right to obtain the written disclosures made to your seller unless that information is public information, such as local building permits or pest control inspection report. Of course, if there are any warranties, such as a 10-year roof warranty, you are entitled to the balance of that warranty period. Consult a lawyer for details.

DEAR BOB: I gave my tenant the required notice to move, confirmed with a receipt of notice. She agreed to move out, but the unit is now locked, no one is there and her car is parked in the driveway. I phoned several times but got no reply. What options do I have? I already hired a contractor to update the unit, based on the tenant's promise to move out on schedule. -- Paras R.

DEAR PARAS: Consult a lawyer whose specialty is evictions. I'm sure you have thought of the several possibilities, such as the tenant moved out but left the car, abandoned the apartment and the car, died either in the apartment or elsewhere, is in a hospital or jail, is avoiding you because she refuses to move out, or wants to drag out the eviction procedure to obtain as much free rent from you as possible.

All these situations have happened to me with my rentals. Ask the neighbors if they have seen your tenant or any activity at the rental. Then contact the local police to learn if they have any record of activity at the property or if they can trace your missing tenant. After that, follow your lawyer's advice to regain possession of your rental unit.

DEAR BOB: Several years ago, my mother gave her house to me because she was moving into her new husband's home in Florida. Now I want to sell that house. But my tax adviser says I am stuck with my mother's low cost basis of only $23,000 whereas the house is worth around $375,000 today. At the time of the gift the house was worth about $225,000. Will I have to pay tax on all that capital gain? -- Alan P.

DEAR ALAN: Your tax adviser is correct. The general rule for gifts is the recipient takes over the donor's basis for a property. Unless the property is your principal residence and you have owned and occupied it at least 24 of the 60 months before its sale so you can qualify for the $250,000 tax exemption of Internal Revenue Code 121 (up to $500,000 for a qualified married couple filing jointly), your capital gain will be taxable. The good news is the federal capital gain tax rate is only 15 percent.

DEAR BOB: Last year my husband bought a house in his name on the title and mortgage, but I help him pay the mortgage payments and property taxes. What is the best way for him to transfer to my name 5 percent of the property? How much will it cost? My husband paid a 20 percent cash down payment. -- Patricia S.