An attorney told me that being put on a deed as joint tennant is not a taxable event.?

Question

IF someone puts you on title as a Joint Tennant with rights of survivorship, can it not be a gift. Subject to gift tax?
And is survivorship and the assuption of the whole tennancy (ownership) taxable, or is estate tax avoidable??

Answer 1

That depends on who is being put on the deed, what the value of the property is and other factors.

First if a spouse puts his/her spouse on the deed then it is a fully exempt transfer for Gift Tax Purposes and there will be no tax.

Second the IRS allows each person a lifetime exemption for Gift Tax Purposes of 1 million dollars. Thus if the person who is now owner of the property never made a gift in his/her life before, and the property being transfered is less than $1million in value, then there will also not be a tax. However, if the transfer is of greater value than $12,000 (the annual gift tax exemption) then a Gift Tax Return must be prepared by your accountant or attorney to report the transfer (so the IRS can track how much of the $1million lifetime exemption you have used).

Also, depending on your jurisdiction you will possibly have to pay a transfer tax (my area has a 1% local and 1% county tax). There also are exemptions for this tax as well (most family transfers are exempt from transfer tax). However, these are local rules and each state is different.

As for the estate tax, there is currently a $2million estate tax exemption at the Federal Level (which climbs to 3.5 million by 2009, is unlimited in 2010, and drops back to 1million in 2011(assuming congress doesn't revise)). Thus if the entire amount of assets being transfered is under the exemption there will not be any tax here either. Thus, it depends.

These are fairly comples tax issues which you should consult a professional in your state for answers to. Please don't try and do this type of transfer yourself. I hope this helps.

Answer 2

If a tax attorney told you it isn't a taxable event, I'd tend to take his or her word for it.

If it is a gift, it's not your problem as gift taxes are owed by the giver, never the recipient.

Unless the value exceeds the the estate tax exemption, no tax would be due. That's up past a million right now. Not sure if the value that transfers on death is included in the estate for tax purposes; that's another question for the tax attorney.

Answer 3

As you have already been told, there are factors you did not mention that affect the answer. You have already consulted an attorney. If you want a second opinion, consult another attorney. You have no idea who is answering you on Yahoo.

Answer 4

Taxable to you or the other person? I don't understand your question.