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My parents are getting up there in years and we just had a scare with
Mom, we though she'd had a stroke but didn't, and my father would like
me to move my family in to help with future occurances or health
issues. He wants to give me the property, about 7 acers in the woods,
have us move into the main house and then him and mom would live in an
apartment above the barn. This way we can help with day to day stuff
with them and the property and if mom isn't able to drive again then
my wife can take them places they need to go, she does that now but we
are 30 minutes away so it makes it difficult. My question is if he
deeds us the property and we move in and sell off our current house
how will that affect us with taxes?? I'd like to sell the house and
clear up our current home loan then take the remainder of the cash and
put it into my parents place. This would be a win win situation for
all of us but if taxes will be very high I'm not sure we can do it.
Any ideas??
Bill
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wpflumus@yahoo.com wrote:
My parents are getting up there in years and we just had a scare
with Mom, we though she'd had a stroke but didn't, and my father
would like me to move my family in to help with future occurances
or health issues. He wants to give me the property, about 7 acers
in the woods, have us move into the main house and then him and
mom would live in an apartment above the barn. This way we can
help with day to day stuff with them and the property and if mom
isn't able to drive again then my wife can take them places they
need to go, she does that now but we are 30 minutes away so it
makes it difficult. My question is if he deeds us the property
and we move in and sell off our current house how will that affect
us with taxes?? I'd like to sell the house and clear up our
current home loan then take the remainder of the cash and put it
into my parents place. This would be a win win situation for all
of us but if taxes will be very high I'm not sure we can do it.
This idea is seldom a good idea. First of all there's gift tax. If
your parents make this gift and the property is worth more than
$26,000 (or $52,000 in a community property state) they will be
required to file a gift tax return. It may not require payment of
any gift tax currently, but it might increase the amount of estate
tax payable when they die.
Then there's income tax. If your parents were to sell the property
they would pay income tax on the difference between the sale price
and their basis (generally about what they bought it for). And if
they gave it to you, you'd have the same basis for income tax
purposes as they do.
But if you inherit the property the basis will be adjusted to the
value when they die. That is to say that a lot of capital gain will
be forgiven. So it could be a relative tax nightmare to do what you
suggest.
If you are concerned with management of the property, your parents
can set up a trust and make you the trustee. Doing so will preserve
all the tax benefits of their retaining ownership while transferring
legal management to you. And should will also avoid the necessity of
probate, which may be one of your goals.
Stu
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wpflumus@yahoo.com wrote in news:uomj04h5djb9t402taf66pusdc6nmpk5cr@
4ax.com:
My parents are getting up there in years and we just had a scare with
Mom, we though she'd had a stroke but didn't, and my father would like
me to move my family in to help with future occurances or health
issues. He wants to give me the property, about 7 acers in the woods,
have us move into the main house and then him and mom would live in an
apartment above the barn. This way we can help with day to day stuff
with them and the property and if mom isn't able to drive again then
my wife can take them places they need to go, she does that now but we
are 30 minutes away so it makes it difficult. My question is if he
deeds us the property and we move in and sell off our current house
how will that affect us with taxes?? I'd like to sell the house and
clear up our current home loan then take the remainder of the cash and
put it into my parents place. This would be a win win situation for
all of us but if taxes will be very high I'm not sure we can do it.
Any ideas??
Bill
You've got elderly parents and are considering doing a real estate
transaction with them.
You're asking for advice on a newsgroup. Now you've got two problems.
Here's the rule: no one competent to answer your question properly
(i.e., a lawyer) will do so lest he inadventently create an attorney-
client relationship. Anyone willing to answer your question (i.e., a
non-lawyer) probably won't be competent to do so. But it doesn't take a
lawyer to figure out that nobody could answer your question properly
based on the scant information you give.
Hire an attorney. Or have your parents hire an attorney. (Depending on
their financial situtation, perhaps they could get some pro bono work
from an elder-law practice. Have you checked with your parents' county's
Department of Senior Services?)
Lawyers are trained to work out the legal consequences of situations like
yours. Suppose your parents deed the farm to you. One day you're
plowing down by the creek, you tip the tractor over, and you're trapped
under it. Lassie races to the house to tell your wife, who jumps in the
car to get help, and on the way to town she runs down a hitchhiker. You
die, your wife inherits the farm, and the hitchhiker sues. What happens
to the farm (and your parents) if the hitchhiker gets a judgment against
your wife?
Look, you can't even spell the word "acres," and you want to do a real
estate transaction with "help" from random strangers on this newsgroup.
Not a good idea.
Get real help. Hire an attorney.
*** I am not one of those, so this can't be legal advice. ***
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Bill,
Your parents are getting on in years and they want to deed you the
property, move to an apartment above the barn, and have you live in
the main house.
You ask about tax consequences.
I'm not sure why you posted here instead of to a more appropriate
group -- misc.taxes.moderated, for instance -- but I'll bet you'd get
the same advice: seek help from a qualified professional, most likely
a lawyer with a tax and real estate practice.
Taxes are just part of what you need to worry about. If there are
other potential heirs you want to make sure the transfer is properly
drawn. I don't know whether it would be better for this to be a sale
at market price, a sale at a bargain price, or an outright gift --
but your lawyer will. There are undoubtedly other possible
consequences that neither you nor I have thought of. For example, if
there are any code violations in the house they may have to be fixed
before title can transfer. Various inspections may be required.
The old proverb "penny wise and pound foolish" applies here. A
misstep could cost you thousands, as well as untold aggravation. A
few hundred for an hour or so with a lawyer is cheap insurance
against that.
--
If you e-mail me from a fake address, your fingers will drop off.
I am not a lawyer; this is not legal advice. When you read anything
legal on the net, always verify it on your own, in light of your
particular circumstances. You may also need to consult a lawyer.
Stan Brown, Oak Road Systems, Tompkins County, New York, USA
http://OakRoadSystems.com
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wpflu...@yahoo.com wrote:
I'd like to sell the house and
clear up our current home loan then take the remainder of the cash and
put it into my parents place. This would be a win win situation for
all of us but if taxes will be very high I'm not sure we can do it.
Any ideas??
Bill
Andy comments:
Here's an idea that might work if you state laws permit it :
Have your parents "quit claim" their hourse to you, BUT retaining a
"life estate". ( This means that you have no control over the house
until
their death, but the deed allows you to sell the house immediately
after
their death, if you want, without probate). You can then move in, do
the
barn apartment thing if they want, and sell your own house, paying it
off (hopefully).
Upon their deaths, you will own the house, AND get the step up in
basis (for tax purposes) because you had no control or ownership
of the house until they died. As long as the value is below the
inheritance cut-in (whatever it is when they both die), there will be
no gift tax due. Keep records of the value when the "quit claim" is
filed, as best you can, tho..... The local tax assessment would be a
good start, if your state requires 100% value assessment....
This "quit claim with life estate" MUST be registered with the local
tax office, if you want to avoid a hassle later.
Your parents are still responsible for taxes and upkeep, since they
have reserved the right to live there for the remainder of their
lives.
As a practical matter, the tax assessor doesn't care who actually
makes the payment.
ONE CAVEAT tho.... if there are federal or state inheritance taxes
due
upon their deaths, this doesn't avoid them. You need to keep records
of
things, and check to see if the values are going to be above the
inheritance tax cut-in....
I suggest you contact an attorney who is skilled in ELDER LAW to
verify this, and to modify these suggestions if your state laws or
circumstances are different from, say, Florida --- where this works
very well...
No, I am not an attorney (nor related to one), but I have seen this
method
work very well in Florida. Nobody gets cheated, all taxes that are due
are
paid, and you keep a LOT of stuff out of probate....
By the way, it would be handy for them to list you as contingent
beneficiary
on bank accounts and stuff, --- you may be able to avoid probate
entirely
if you do some planning ....... It ain't rocket surgery.
Andy in Eureka, Texas
PS If your parents get pissed off, and kick you out later, they can.
It's still
their house while they are alive.......
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On 2008-04-20 05:10:14 -0700, Deadrat <a@b.com> said:
You're asking for advice on a newsgroup. Now you've got two problems.
Here's the rule: no one competent to answer your question properly
(i.e., a lawyer) will do so lest he inadventently create an attorney-
client relationship. Anyone willing to answer your question (i.e., a
non-lawyer) probably won't be competent to do so. But it doesn't take a
lawyer to figure out that nobody could answer your question properly
based on the scant information you give.
Good thinking. But the trouble is, if everybody took your advice and
nobody posting here asked for legal advice and no real lawyers or
anyone else gave any advice, reading the newsgroup would be really dull
and interesting issues you can sink your teeth into would be few and
far between.
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Don <dwzimm@telus.net> wrote in news:hnto04lpc652e32ugi6l15tbi4ln580urs@
4ax.com:
On 2008-04-20 05:10:14 -0700, Deadrat <a@b.com> said:
Good thinking. But the trouble is, if everybody took your advice and
nobody posting here asked for legal advice and no real lawyers or
anyone else gave any advice, reading the newsgroup would be really dull
and interesting issues you can sink your teeth into would be few and
far between.
And your point? That people should post here with the expectation of
obtaining free, valuable, and specific legal advice so the rest of us can
be entertained?
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Terms of use of this message: It may not be stored or read in North
Dakota. (see http://www.circleid.com/posts/811611_david_ritz_court_spam/
for the reason.)
In article <hnto04lpc652e32ugi6l15tbi4ln580urs@4ax.com>,
Don <dwzimm@telus.net> wrote:
But the trouble is, if everybody took your advice and
nobody posting here asked for legal advice and no real lawyers or
anyone else gave any advice, reading the newsgroup would be really dull
and interesting issues you can sink your teeth into would be few and
far between.
I could still come up with questions and hypotheticals. Try this one
(based on a real case):
Victim investigates Attacker and publishes the information Victim
finds proving Attacker is doing Bad Stuff. Attacker gets upset and
sues Victim, asking for $50,000 plus a permanent injunction. Victim
demands a jury trial. At the 11th hour, Attacker amends the lawsuit
to ask only for the permanent injunction. Based on that, the judge
denies a jury.
The case is held (it looks like a railroading, but the judge sealed
the transcript so that perjury can't be demonstrated), and the judge
awards both the permanent injunction telling Victim never to talk
about Attacker, _and_ requires Victim to pay Attacker the $50,000 that
Attacker claimed it wasn't asking for.
Is this a violation of Victim's right to a jury trial?
Seth
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Deadrat <a@b.com> wrote:
Don <dwzimm@telus.net> wrote
And your point? That people should post here with the expectation
of obtaining free, valuable, and specific legal advice so the rest
of us can be entertained?
Sometimes, even often, people do get good information and legal advice
here. It may be hard to figure out which that is amongst the forest of
comments, but they are there.
Stu
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On 2008-04-22 03:56:32 -0700, Deadrat <a@b.com> said:
And your point? That people should post here with the expectation of
obtaining free, valuable, and specific legal advice so the rest of us can
be entertained?
No, people should not expect free, authentic, usable legal advice. But
then if one leans too far in the other direction and obsessively avoids
meaningful discussion, there is not much reason for a newsgroup to
exist at all. Perhaps a good basis for comparison would be newsgroups
devoted to medical issues. People post to those groups all the time
wanting information related to their personal medical and health
problems. But generally the other members do not decline to offer
opinions and advice on the grounds that a doctor-patient relationship
has not been established.
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On Wed, 23 Apr 2008 06:59:12 -0400, sethb@panix.com (Seth) wrote:
. . . .
I could still come up with questions and hypotheticals. Try this one
(based on a real case):
Victim investigates Attacker and publishes the information Victim
finds proving Attacker is doing Bad Stuff. Attacker gets upset and
sues Victim, asking for $50,000 plus a permanent injunction. Victim
demands a jury trial. At the 11th hour, Attacker amends the lawsuit
to ask only for the permanent injunction. Based on that, the judge
denies a jury.
The case is held (it looks like a railroading, but the judge sealed
the transcript so that perjury can't be demonstrated), and the judge
awards both the permanent injunction telling Victim never to talk
about Attacker, _and_ requires Victim to pay Attacker the $50,000 that
Attacker claimed it wasn't asking for.
Is this a violation of Victim's right to a jury trial?
In Oregon, it probably would be reversible for granting relief in
excess of the pleadings. I doubt the courts would consider the
locally customary line "such other relief as is just and equitable" to
include the damages if they were specifically removed.
Daniel Reitman
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Stuart Bronstein <spamtrap@lexregia.com> wrote in
news:oh5u04t741faqp2hkuat1l0mj5b8h68ctu@4ax.com:
Deadrat <a@b.com> wrote:
Sometimes, even often, people do get good information and legal advice
here.
Sometimes, but let's not get carried away with often, people do get good
information and good advice about the law here.
I have *never* seen anyone get good, specific legal advice here.
It may be hard to figure out which that is amongst the forest of
comments, but they are there.
Which, of course, only makes the problem worse.
Stu
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Don <dwzimm@telus.net> wrote in
news:ph5u04ltr2jommiv9fenese22ec2ju7o1c@4ax.com:
On 2008-04-22 03:56:32 -0700, Deadrat <a@b.com> said:
No, people should not expect free, authentic, usable legal advice.
Hmmm. Where have I heard that before? It sounds familiar.
But
then if one leans too far in the other direction and obsessively
avoids meaningful discussion, there is not much reason for a newsgroup
to exist at all.
You have snipped my original comment, which warned about expecting
"proper" answers to a specific legal problem (one having to do with a
real estate transaction with parents). I certainly didn't mean to leave
the impression that this covers all meaningful discussion.
Perhaps a good basis for comparison would be
newsgroups devoted to medical issues.
Spot on. Generally, most states define the practice of medicine as.
- Representing oneself as a doctor
- Prescribing medicine or performing surgery
- Diagnosing illness
This is exactly parallel to the practice of law:
- Representing oneself as an attorney
- Representing another pary in court
- Proving legal advice for specific legal problems.
People post to those groups all
the time wanting information related to their personal medical and
health problems.
And if they expect detailed and accurate diagnoses and courses of
treatment, they now have two problems.
But generally the other members do not decline to
offer opinions and advice on the grounds that a doctor-patient
relationship has not been established.
Again, you have snipped my original comment, but the warning about the
creation of an inadvertent attorney-client relationship was restricted to
attorneys. And the same warning about a doctor-patient relationship
applies to doctors on medical newsgroups.
I don't read medical newsgroups, but I would be surprised to find doctors
posting specific diagnoses in response to posts from people who give
their symptoms.
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On Thu, 24 Apr 2008 07:51:07 -0400, Deadrat <a@b.com> wrote:
Stuart Bronstein <spamtrap@lexregia.com> wrote in
news:oh5u04t741faqp2hkuat1l0mj5b8h68ctu@4ax.com:
Deadrat <a@b.com> wrote:
Don <dwzimm@telus.net> wrote
And your point? That people should post here with the expectation
of obtaining free, valuable, and specific legal advice so the rest
of us can be entertained?
Sometimes, even often, people do get good information and legal advice
here.
Sometimes, but let's not get carried away with often, people do get good
information and good advice about the law here.
I have *never* seen anyone get good, specific legal advice here.
Giving "specific legal advice" based on an almost certainly incomplete
description of something in a Usenet post would probably be
malpractice for a lawyer. It is at that line where a lawyer would
also run the risk of inadvertently creating an attorney-client
relationship of some sort.
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In article <3vs0149t03cnqkqireu328qv2dih0liiqg@4ax.com>,
Deadrat <a@b.com> wrote:
Stuart Bronstein <spamtrap@lexregia.com> wrote in
news:oh5u04t741faqp2hkuat1l0mj5b8h68ctu@4ax.com:
Sometimes, but let's not get carried away with often, people do get good
information and good advice about the law here.
I have *never* seen anyone get good, specific legal advice here.
<hat mode=nit-picker on-top-of=editor's "shade">
He *did*not* say people get "good legal advice" here, specific or otherwise.
He said they get "good information" and "legal advice" here, sometimes
or even often.
<doffs hat>
I've seen some very pointed, and "case-specific", advice given -- on more
than one occasion.
Admittedly the case-specific advice has generally been in one of two forms:
1) "*DON'T* do that!! It's likely to get you arrested and jail/prison time."
2) "DON'T talk about this any further in a public forum, you never know
who might be listening (and anything you say can be used against you).
See a lawyer, and go over the details in a confidential setting."
I'll also suggest that: "you need to consult a practicing legal professional,
on a _professional_ basis" is "very good advice" about the legal situation
under discussion, and that -that- advice *is* "sometimes, or even often",
offered here.
I'm sure you wouldn't want to argue that that is _not_ good legal advice,
is that not true?
<grin>
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bonomi@host122.r-bonomi.com (Robert Bonomi) wrote in
news:rng31410mmkgvi26smmojbu7deetqlk3sn@4ax.com:
In article <3vs0149t03cnqkqireu328qv2dih0liiqg@4ax.com>, Deadrat <a@b.com> wrote: <hat mode=nit-picker on-top-of=editor's "shade"> He *did*not* say people get "good legal advice" here, specific or otherwise. He said they get "good information" and "legal advice" here, sometimes or even often. <doffs hat>
patting yourself on the back. If "good" doesn't modify both of the
conjoined noun phrases, then there's nothing to talk about. Do really
suppose that SB meant that people do get good information and mediocre
legal advice?
I've seen some very pointed, and "case-specific", advice given -- on
more than one occasion.
Admittedly the case-specific advice has generally been in one of two
forms:
1) "*DON'T* do that!! It's likely to get you arrested and
jail/prison time." 2) "DON'T talk about this any further in a
public forum, you never know
who might be listening (and anything you say can be used against
you). See a lawyer, and go over the details in a confidential
setting."
I'll also suggest that: "you need to consult a practicing legal
professional, on a _professional_ basis" is "very good advice" about
the legal situation under discussion, and that -that- advice *is*
"sometimes, or even often", offered here.
I'm sure you wouldn't want to argue that that is _not_ good legal
advice, is that not true?
Of course not. I would argue that this kind of advice is hardly specific
to the particular situation. It falls under the broad rubric of that
legal maxim "Noli esse anum."
<grin>
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