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Carole Said:

Mother passed away and brother is trying to take property and bank info from her home. Wants probate attorney.?

We Answered:

YOu need to get a probate atty, get your butt to the courthouse and get an intestate estate opened if you hope to have any impact on what will happen here.

The reverse mortgage property is technically owned by the bank pending the determination of the open reverse mortgage. You generally have the option to pay it off or the bank takes posession.

Curtis Said:

capital Gaines tax info?

We Answered:

Your brother cannot distribute the furniture if there are still debts to the estate.

That said, your brother needs to talk to an Enrolled Agent who can straighten him out.

The house. The house is valued at the value on date of death. If the house was quickly sold, it was probably only worth the $505K it sold for. He probably spent $30,000 in commissions to sell it, so the 1041 will show a $30K Long Term Capial ****LOSS.**** When the estate is closed, that loss will be passed through to the beneficiaries to be used on their own tax returns. (This answer changes if the house was being rented.)

The Reverse Mortgage. The law on the reverse mortgage is such that they are stuck with getting $155K for the $300K and get nothing more. Given these numbers, I doubt there is any interest being paid out of the proceeds.

As for the furniture. UNLESS the will said to donate it, the estate can't get a tax deduction for donating the furniture. He can sell it, but I doubt he needs to.

Vera Said:

Reverse-Mortgage or Equity Loan...to purchase a "new" home for parents?

We Answered:

They will not be able to get a reverse mortgage, as those require that they live in the house, they can not move out of it without paying it off.

As the new home costs more then the old they will not be able to get it with an equity loan.

The best thing would be to sell it and buy the other one, or simply buy the second one and rent this one out for income.

Bernard Said:

question about a reversed mortgage?

We Answered:

As I understand reverse mortgages, the lending institution would pay him a predetermined amount based on the appraised value of the property. Ask a large bank what their rules are. Below is how HUD would treat a reverse mortgage.