Newbie rental home questions
When my grandmother passed away roughly 22 years ago, she left her house in Tennessee to my mother. My mother continued making payments on the house and completely paid off the mortgage. About 10 years ago, she had my name added to the house, and both her and my name now show as the owners of the property on the assessor’s website. Since my grandmother passed away, my parents have been using this house as a rental property. I’m fairly certain that they have never paid taxes on the rental income, which I know is a big bad.
My mother passed away two years ago, but my father continues to rent the house out. My father’s name is not on the house, but her name still is. The current tenants have lived there for a number of years, and there is no current lease. The tenets simply pay the rent month to month, which has always gone to my parents in the form of money orders. There was a lease for their first year, but my name has never been attached to any lease paperwork for the house. Neither my father nor I live in Tennessee. Aside from this house, I am not a homeowner.
My father and I have an agreement that he will continue to rent the house for the income, and when he passes away, I can sell the property. During this time, my father will continue to handle the annual property taxes and insurance on the house along with any maintenance issues.
So, this leads me to a few questions:
1 - Given the process that my name was added to the house, does my father currently have any legal claim to ownership?
2 – Was there ever a situation (my name being added to the home, my mother passing away, etc…) where I had a tax responsibility toward ownership of the property?
3 – Who would be ultimately responsible for the tax generated on the rental income?
4 – Is my ownership of the house helpful in any way towards my taxes (i.e. deductions, assets, etc…)?
5 - Understanding that may not happen for a significant amount of time, what will my tax responsibilities be upon selling the property?