My grandmother's current income keeps her under the 15% tax bracket. (In the last couple years, she's been in the 10% bracket.) the current tax code exempts her from capital gains from the sale of an asset, as long as she has 1) owned the property for at least 1 year, and b) as long as her income has been below the 15% tax threshold. Both of which are true. (I HATE that is true -- I'd be happy to pay the full 25% on full sales price because I believe in paying taxes -- but I am not going to not take advantage of it if ConAgra and the Koch brothers get out of paying their fair share. This one time, the little folk are coming out ahead.)
The problem with Gran believing that her land was worth $100 an acre is that she charged an equivalent rent and would not be moved when anyone tried to convince her otherwise. So yes, income in the painful poverty zone.
(Article here, but I verified it. Article
http://www.bankrate.com/finance/taxes/no-capital-gains-due-for-some-investors-1.aspx
We already have a trust in place, for which I am fully authorized to do what is needed to make it work, so any consultation I do with non-trust members (I.e. My mother) is exactly that -- consultation. I don't want to wreck my relationship with my mother, so she does get to advise and consent, but I know that continuing to lose money is a bad thing. (Also, I can be held criminally liable if I mismanage and continuing to lose money is a textbook definition of mismanagement.)
We will certainly be using a tax attorney for next year (probably the one associated with whatever financial services I go with). I don't screw around with the IRS, and I don't mind paying fair taxes.
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