I live in California and currently rent a house from my parents. It's worth approximately $550,000 and my parents CPA said that they can transfer the house to my name without paying capital gains. They want to use the "unified tax credit" and both gift myself and my husband $12,000 each. Is this possible?
2007-01-22 14:35:49 · 3 answers · asked by Julie C 1 in Business & Finance ➔ Renting & Real Estate
Yes, but there are limitations for how much can be gifted per year, and more importantly during each of your lifetimes.
It is also possible to set up a revocable living trust, place the house in the trust and have it transferred to you after their death.
They can also create a NPO (non-profit organization) (charity). The charity can name you and your children and the recipients, put the house in the charity, then you get to live there for free. This one is tricky and needs a lawyer.
Now here is a good one. They can sell you the house for $1. They can't take a capital gains loss, and the actual value of the property will not change as the appraiser will deem it to be a non valid sale, which means the value won't change.
The only problem with that, is the IRS can declare that the basis you have in the property is $1, so when you sell it, you would pay the capital gains for the difference between $1 and the selling price.
Good Luck
2007-01-22 14:46:39 · answer #1 · answered by A_Kansan 4 · 0⤊ 0⤋
capital income tax might want to be due on the income of the sale. the speed might want to both be 5 or 15 % of the income. (relying on their marginal tax cost) they might provide you with as a lot as 12000 each and every 3 hundred and sixty 5 days, tax free without present tax go back required to be filed..... they might each and every also provide away as a lot as a million money of their lifetime tax free (although a federal type 706 might want to be required to be filed you would produce different tax implications that you have not even all started to scratch the exterior of yet.
2016-12-02 22:23:30 · answer #2 · answered by erke 4 · 0⤊ 0⤋
sure..if they do so each year...hopefully your parents won't die anytime soon considering the property will take 45 years to transfer
2007-01-22 14:40:23 · answer #3 · answered by fade_this_rally 7 · 0⤊ 0⤋