Cutting Back on Home Sales Commissions

DEAR SCOTT: As a co-owner, if your father pays the $15,500 property taxes to prevent loss of the property at a tax sale, he is entitled to a 50 percent reimbursement from his co-owner brother. Also, he is entitled to receive 50 percent of the roof cost. But your father is not entitled to receive full ownership of the property just for paying the property taxes. However, he can bring a partition lawsuit to force the sale of the property. That is the only legal recourse he has.

Of course, when the property is sold, then your father will receive the 50 percent of the property taxes he paid on behalf of his brother, plus half of the roof cost. For details, your father should consult a local real estate lawyer.

DEAR BOB: You recently had an inquiry from a lady who said her grandmother deeded real estate to her. The deed was signed and notarized but not recorded before the grandmother died. The grandmother's will gave the same property to her son. In previous articles, you said an unrecorded deed might still be valid. Why would there be a possibility in this situation that the son could get the property based on grandmother's will? -- Jerome G.

DEAR JEROME: The legal issue is whether grandmother delivered the deed to her granddaughter conditionally, such as, "Here is my deed, but don't record it until after I die."

The general rule in most states is that such a conditional delivery is void after the grantor dies. If that was the situation, then the son takes title according to grandmother's will.

This is a classic example of why deeds should not be delivered conditionally to a grantee. Another problem could arise if the grandmother changed her mind and sold the property without notice of the unrecorded deed.

DEAR BOB: Is a foreign national who has lived three years in his principal residence -- paying U.S. taxes with a Social Security number but without a green card -- entitled to claim the $250,000 or $500,000 home-sale tax deduction? -- Gloria S.

DEAR GLORIA: Yes. Immigration status doesn't matter as long as the foreign national has held title to the principal residence at least 24 of the 60 months before its sale and has occupied it for that time. Up to $250,000 in sales profits are then tax-free for a single home seller.

If the principal-residence owner is married and the spouse meets the occupancy test but is not on the title, then up to $500,000 in capital gains are tax-free, thanks to Internal Revenue Code 121. A joint tax return must then be filed in the year of the home sale.

DEAR BOB: My wife and I just bought a house for her parents because they couldn't get a mortgage. They live in the house and pay us for the mortgage. We want them to get the tax deductions. But we are concerned about adding them to the title in case they end up in a nursing home or in some other way are forced to use the home's equity. Is there a way for them to get the tax deductions and avoid liability if they are sued? We are considering a contract for deed but are concerned about the tax liability on ourselves. -- Jeff R.

DEAR JEFF: Unless the parents are on the home title or have a contract to buy their principal residence (such as a contract for deed), they are not entitled to claim itemized income-tax deductions for the mortgage interest and property taxes they pay.

DEAR BOB: After I got my divorce and my ex-husband's name has been taken off everything, the title company refuses to take his name off the house. What can I do? -- Kellie W.