Am I liable for taxes as a cosigner?

Question

I cosigned with my mom to get a house about 10 years ago. She refinanced a few years back and we thought my name was no longer on it but last week it was discovered that I'm still on the title. Now she is selling the house, my concern is, with the profit she is making from the house--will I be liable for any part of it on my income taxes since my name is on the title?

Answer 1

If you are on the title to the property...YES.

Not if you are only a co-signer on the loan.

You can deduct 250k from home sale profits once every 5 years. Just have her use this total deduction (actually home sale profit) on her taxes. You can also "split" the profit any way you like on the taxes but...have her take it, you may sell in a couple years and need it.

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Answer 2

Very likely and you will have to sign off on the paperwork when the house is sold (or at some point) since your name is actually on the title.

Ive found that once someones name is added as cosigner on any type of financial deal that the name is very rarely removed for any reason. Ive had credit checks come back with a mother in laws car loan from years prior affecting my credit score.

Answer 3

Unless she is going to make a whopper of a killing on the house, no. The profits from sale of a primary residence, unless they exceed $250,000 (the profits, not the sale price) are not subject to Federal income tax.

Answer 4

If you appear as the co-owner on the deed, but that was not the intent of the parties, you and your mother may be able to record a corrected deed to fix the problem, depending on the state law in your jurisdiction.