Legal Question in Tax Law in Illinois

Taxes on Joint Tenancy Real Estate

1992 Mom puts son on deed, JT. No money exchanged, son's name put on to avoid probate. Son active duty military, kept this IL as his official home address for entire career, including mail, voting, vehicle registrations, church, driver's license and bank account, even though he rented housing nationwide. Mom died 2005, no estate. House being sold for $60,000 in 2006 by son with proceeds divided among siblings. What, if any, tax liabilities exist? Should value of house have been reported by JT son when name put on deed?


Asked on 1/29/06, 10:41 am

1 Answer from Attorneys
Cyndi Perez Trostin

Re: Taxes on Joint Tenancy Real Estate

First of all, when the son was added to the deed as a joint tenant, it would have been a taxable/reportable gift to the person doing the gifting (the mother), but would have had no taxable consequences to the son. Unless the mother died with a taxable estate ($1.5 million in 2005), there would be no overall tax on the gift or the estate as a result.

The son would report the sale of the house in 2006 as a capital transaction. However, since he classified this house as his home, he will probably be able to claim an exemption for sale of the home and pay no additional tax.

Also, because the son is the sole surviving joint tenant, he does not by law have to share the proceeds with his siblings.

Since the above response is based solely on the hypothetical facts you presented in your question, they should not be relied on as legal advice. Only an attorney who is able to completely review the documents involved (including the deed) and ask pertinent questions of you and other people involved, will be able to give you sound legal advice.

Please review this situation with an attorney. The cost involved will be well worth it to protect everyone's interest.

Good luck to you.

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Answered on 1/29/06, 2:03 pm


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