ok here's the deal. my parents own a number of houses and apartments. about a year ago they helped me to get my first place by putting the morgage under their name....even though i put the deposit down and pay the morgage. since they own multiple properties and buy and sell freqently....technically in order to avoid paying a bunch of taxes on it, they have to keep it for 2 years before they can sell it (1 more year left). however i would like to move onto another place. is there any way that they could transfer the condo under my name so i can put it on the market quicker?
2006-09-18 05:03:56 · 9 answers · asked by Anthony V 4 in Business & Finance ➔ Renting & Real Estate
Well they have several choices, the easiest way is to do a 1031 exchange to avoid the capitol gains tax. Other than that the only way they can change the mortgage would to be refinance. If you have any additional questions feel free to contact me at jfreeman@bourdeaufinancial.com
866 530 7300
or check my company out on the web at www.justgetaloan.net Americas home for real estate financing needs. There you can get pre approved, get the best rates and loan programs. No matter what the situation; Can't we all just get a loan?
2006-09-18 05:49:27 · answer #1 · answered by Anonymous · 0⤊ 0⤋
Fro what you are telling us, I assume the property is in your parent's name. If so, in order for them to have the tax savings, they will have to declare that to be their primary residence. Then the $250,000/$500,000 tax exemption run applies every two years. If it is not their primary residence, they can sell it at a long term capital gain tax rate of 15% after 12 months. The same would apply to you if the property is in your name.
They can transfer the property to your name but you will have to be careful about the issue of gift tax for your parents. Also, you need to find out from the lender whether they would allow the transfer. Some will if your parents stay on the loan as guarantors.
2006-09-18 05:41:00 · answer #2 · answered by Anonymous · 0⤊ 0⤋
Since they'd have to sell it to you to do that, it's going to take another year. My guess is that there's a pre-payment penalty on the mortgage that they have on the property and they don't want to have to pay that.
Your legal status is that of a tenant. You have no ownership rights at present. Your parents own the property and are renting it to you for the mortgate payments. The exception to this would be if they sold it to you and took back a "wrap" mortgage from you. If that was the case you'd know it and would have mentioned it.
To transfer sole title to you, they'll have to sell it to you and you'll need to get your own mortgage. If they sell it to you for less than fair market value, there may be gift tax consequences for your parents, in addition to the pre-payment penalty on the current first note. If they sell it to you for current fair market value, they will have to pay capital gains taxes on the gain. You probably won't be agle to sell it for a couple of years as you'll not be able to sell it for enough to pay off your mortgage and the sales costs.
Consult with your parents AND a licensed real estate attorney to structure the deal propertly to minimize the risks, costs, and tax consequences.
2006-09-18 06:28:07 · answer #3 · answered by Bostonian In MO 7 · 0⤊ 0⤋
Yes, quitclaim the property to you. They probably should have done this as soon as it closed.
Now there are still a lot of issues and possible issues: long versus short term capital gains/capital losses, and prepayment penalties on the loans, to name the first two that spring to mind. There are strategies for dealing with some of them, depending upon your further goals. Others, like prepayment penalties, you either have to pay or wait until they expire, if you have them.
2006-09-18 08:08:44 · answer #4 · answered by Searchlight Crusade 5 · 0⤊ 0⤋
Put the property and the loan in your name, if you qualify for a refinance. Check with your parents - surely they know a lender who can help with this.
2006-09-18 05:28:54 · answer #5 · answered by paleblueshoe 4 · 0⤊ 0⤋
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2016-10-15 03:19:24 · answer #6 · answered by Anonymous · 0⤊ 0⤋
Many unknowns which your parents have not really told you. Suggest that you consult a financial adviser or a tax lawyer from the sound of it.
2006-09-18 05:08:38 · answer #7 · answered by Tom Cat 4 · 0⤊ 0⤋
ask your parents. they should know since they deal with real estate. or you can ask a real estate atty in your area.
2006-09-18 05:08:13 · answer #8 · answered by Anonymous · 0⤊ 0⤋
Your parents can, but not you!
2006-09-18 05:47:01 · answer #9 · answered by Anonymous · 0⤊ 0⤋