I currently HAVE a living trust; however, I want to change it so that my nephew can have the house, and have my daughter "sell" her half to him for 1/2 market value (at the time). I don't want the taxes to change, as I'm currently under Prop 13 (VERY low taxes; new ones would kill 'em). Can it be done? Legally? Do I add him as a trustee NOW? Any help will be MUCH appreciated!
2007-10-27 21:16:39 · 2 answers · asked by Linda T 1 in Business & Finance ➔ Taxes ➔ United States
In addition to what wartz has correctly stated, a sale that fails the "arms length" test would be ignored as far as the sales price was concerned. The value would be subject to reassessment to FMV and the taxes would be levied based upon that value, NOT the sub-market sales price.
2007-10-28 04:20:39 · answer #1 · answered by Bostonian In MO 7 · 0⤊ 0⤋
For the purpose of assessments under Prop 13, a living trust is ignored. You can transfer the property to your daughter without triggering a reassessment but not your nephew.
2007-10-28 02:04:56 · answer #2 · answered by Anonymous · 1⤊ 0⤋