QUESTION
How can we transfer title for a home that we're getting ready to buy into our son's name without causing undue headache and taxes?
Asked on Jan 09th, 2022 on Real Estate - Colorado
More details to this question:
My husband and I are under contract to purchase a home for a cash price. The plan is for our son to buy the home from us for the same price. My question is what is legal and won’t cause us a tax headache? Before closing, should we ask for the title to be put in all three of our names, then after he gets a mortgage, remove both our names and leave only his?
1 ANSWER
As long as it's a transaction for due consideration (fair price), and he is paying you the same amount that you are paying for the property, there shouldn't be any capital gain or gift tax issues. As far as how to proceed with the deed, it doesn't seem to me to make much difference whether you start with all three of your names on the deed and then transfer solely to your son, or have it just in your names to begin, and then transfer it outright to him. Both involve a similar deed transfer - preferably a warranty deed - to be recorded.
Answered on Jan 10th, 2022 at 9:56 AM