My mom transferred 50% of her principal residence to me as a gift. Just to confirm that she has to file a principal residence designation form. And do i have to report any capital gains tax immediately on the FMV of the house that was transferred to me ? I still live with her.
Yes, she needs to fill out the Principal Residence Designation form. Even if she is not selling her principal residence, she is still giving up ownership of part of it. You don't have report anything on your own tax return until you sell the residence. At that time, if it's not your principal residence, you may have to pay tax on capital gains.
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