QUESTION
What are the tax liabilities of transferring the house title?
Asked on May 15th, 2015 on Estate Planning - California
More details to this question:
Me and my siblings names were added to the title of our Moms house after our Dad died. We assumed she would die before the house was sold. But now, she wants to sell the house because she is too old to live there by herself anymore. Are there any tax repercussions for her or for us if we deed the house back to her in the same way we were added to it? I would like her name to be the sole name on the deed because then she will receive all the profits from the sale and have no capital gains tax. But I am not sure if doing this would cause other issues.
11 ANSWERS
3 Awards
There are lots of issues, not just limited to tax issues. You and she should seek legal counsel before making any transfers.
Answered on May 18th, 2015 at 6:41 AM
Business Law Attorney serving Bingham Farms, MI
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James T. Weiner, P.C.
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Deed it back to her.. there should be no tax repercussions to undo the original gift to you
Answered on May 18th, 2015 at 4:53 AM
There are a number of tax consequences to either action for everyone whose name appears on the title. Contact a tax attorney or accountant with experience in real estate for specific advice.
Answered on May 18th, 2015 at 4:16 AM
Edwin K. Niles
1. With proper preparation, the Preliminary Change of Ownership Report will avoid a re-assessment. 2. If Mom sells during her lifetime she may have a capital gain; if you inherit the property you get a stepped-up basis to the value on the date of death.
Answered on May 18th, 2015 at 4:07 AM
Trusts Attorney serving Sacramento, CA
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Law Office of Victor Waid
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Seek the services of a tax accountant to advise you.
Answered on May 18th, 2015 at 4:05 AM
You need to speak to a local tax attorney. ?Probably it could be considered a gift covered by the gift exclusion. ?It was unwise, from a tax stand point for your mother to make the original transfer. ?She needs to speak with a trust and estate attorney to figure out what is the best way to shelter her future assets.
Answered on May 18th, 2015 at 4:03 AM
Appellate Attorney serving Grosse Pointe Farms, MI
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Musilli Brennan Associates, PLLC
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What you are considering sounds plausible and possible, but I would suggest that you discuss it in detail with an attorney or tax counselor.
Answered on May 15th, 2015 at 5:25 PM
Probate Attorney serving New Orleans, LA
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James G. Maguire
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There would be no tax consequences. You and you siblings would be making a donation to your mother. Since the house is her residence, there would be no tax consequences if she sells it.
Answered on May 15th, 2015 at 5:23 PM
Probate Attorney serving Newport, OR
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Minor, Bandonis & Haggerty P.C.
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You should run this question by your tax advisor, or your mother's. I'm not sure that she will qualify for exclusion of capital gain under Section 121, even if you do deed it back she has to have OWNED the house for the two years prior to the sale, and she has not. You and your siblings owned part. You could hold that you are reversing the gift transfer, and try to treat it as though it never happened. But I cannot say for sure that that will work.
Answered on May 15th, 2015 at 5:18 PM
Commercial Attorney serving Chicago, IL
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Ashcraft & Ashcraft, Ltd.
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When you received title to the house you did not pay any consideration to your mother and there would have been no gift tax reporting. You could maintain the first transfer was for estate purposes and there was no completed gift since your mother remained in control of the house and continued to reside there. The transfer back is a reversal of the original transaction and similarly without tax consequence.
Answered on May 15th, 2015 at 5:18 PM
2 Awards
There are likely tax consequences but no one can tell you for sure without knowing the basis when it was transferred, the sale price, etc. See an accountant.
Answered on May 15th, 2015 at 5:16 PM