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How can you transfer a home from family member?

2,192 Views | 19 Replies | Last: 2 yr ago by Scruffy
The Silverback
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AG
Assuming home is paid for and he would like to transfer the deed/title of the house to his child, are there high closing costs or tax implications in doing so?

Martin Q. Blank
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Just file a deed with the county.

The tax implications are capital gains. If the parent transferred it upon death, the capital gains would be wiped away.
The Silverback
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Martin Q. Blank said:

Just file a deed with the county.

The tax implications are capital gains. If the parent transferred it upon death, the capital gains would be wiped away.
What if said parent is still alive and will remain living there? And to expand, what if the house was purchased from the parents but at a discounted rate?
Martin Cash
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Martin Q. Blank said:

Just file a deed with the county.

The tax implications are capital gains. If the parent transferred it upon death, the capital gains would be wiped away.
There could be gift tax implications as well.
iisanaggie
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Right now, I would wait to transfer upon death. However, I would pay attention to tax law (capital gains, inheritance tax, etc.) and what this administration does to those in the next few years.
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Agilaw
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Make sure you understand the potential pitfalls of using a TODD in Texas. Many times it in not the best avenue to accomplish your goals.
FinMick
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You might look at doing owner financing, and have them sell it to you. Then have them use their annual gift tax exclusion to waive payments ($15K per gifter to giftee). So if you have a couple who own a home, gifting to another couple... that would be $60K that could be used to forgive missed payments per year.
jagvocate
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Agilaw said:

Make sure you understand the potential pitfalls of using a TODD in Texas. Many times it in not the best avenue to accomplish your goals.
An example? Legal pitfall, IRS pitfall, ???
one MEEN Ag
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He's a lawyer. He's set the hook, now you gotta pay up to get those answers.
jagvocate
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one MEEN Ag said:

He's a lawyer. He's set the hook, now you gotta pay up to get those answers.
I mean, PITFALL is damn dire for something as innocuous as a transfer upon death dead. It has to be on file before decedent passes away, need proof of death, it's not like we're talking about pecker cancer.
itsyourboypookie
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Why not have the kid buy it for $1?
380sl
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File a Gift Deed with the county and then file a gift tax return with the IRS. It will fall under the lifetime gift tax exemption (same as if done at death). Property is transferred tax free and no gift tax due.
Tibbers
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one MEEN Ag said:

He's a lawyer. He's set the hook, now you gotta pay up to get those answers.


Why do I feel we are living in the land of the Pharisees?
BusterAg
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This could be relevant:

https://www.irs.gov/taxtopics/tc701

Quote:

If you have a capital gain from the sale of your main home, you may qualify to exclude up to $250,000 of that gain from your income, or up to $500,000 of that gain if you file a joint return with your spouse. Publication 523, Selling Your Home provides rules and worksheets. Topic No. 409 covers general capital gain and loss information.
If the gain on the home sale is greater than the above, get a CPA or tax attorney, it will be worth the money.

If not, read the IRS rules carefully, and follow the rules.
In the end the Party would announce that two and two made five, and you would have to believe it. It was inevitable that they should make that claim sooner or later: the logic of their position demanded it. Not merely the validity of experience, but the very existence of external reality, was tacitly denied by their philosophy. The heresy of heresies was common sense -George Orwell, 1984, Part 1, Chapter 7
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bkag9824
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itsyourboypookie said:

Why not have the kid buy it for $1?


Interesting thought...

For you tax/legals - would this type of sale fall under "arms-length" considerations?
BusterAg
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bkag9824 said:

itsyourboypookie said:

Why not have the kid buy it for $1?


Interesting thought...

For you tax/legals - would this type of sale fall under "arms-length" considerations?
Nope.

The excess value is considered a gift, and is exposed to gift tax limitations.
In the end the Party would announce that two and two made five, and you would have to believe it. It was inevitable that they should make that claim sooner or later: the logic of their position demanded it. Not merely the validity of experience, but the very existence of external reality, was tacitly denied by their philosophy. The heresy of heresies was common sense -George Orwell, 1984, Part 1, Chapter 7
BusterAg
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Honestly, you are likely about to do this tax free unless the estate of the person giving you the house is over the estate tax exemption when he / she dies.

That number right now is $11 million, or $22 million for a joint estate. But, the way we are going, who knows where it will be in the future.
In the end the Party would announce that two and two made five, and you would have to believe it. It was inevitable that they should make that claim sooner or later: the logic of their position demanded it. Not merely the validity of experience, but the very existence of external reality, was tacitly denied by their philosophy. The heresy of heresies was common sense -George Orwell, 1984, Part 1, Chapter 7
NoahAg
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BusterAg said:

Honestly, you are likely about to do this tax free unless the estate of the person giving you the house is over the estate tax exemption when he / she dies.

That number right now is $11 million, or $22 million for a joint estate. But, the way we are going, who knows where it will be in the future.
This. Unless the parent is gonna be close to that $11MM lifetime gift amount, I would think the simplest thing would be to give the house and file IRS form 709.

*Not a tax pro or attorney.
Scruffy
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AG
Why not transfer it into a trust?
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