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04-14-2009, 06:29 PM #1
Renter
- Join Date
- Apr 2009
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Parents-Child Property Transfer Tax?
Example1:
Two 65+ years of age parents transfers the deed of the house(ownership) to their child, who is under 65. Is their a gift tax? What is the tax rate for this kind of property transfer?
Example2:
Two 65+ Years of age parents adds their -65 years of age child to the deeds(ownership) of their house. Is their a tax for this kind of transfer?
Also, can you do a % ownership? Like both parents owns 80% and their child owns 20% or vice versa ?
Example3:
Example2 is completed. Their child inherits the property after they are gone. What is the tax then? Their child already partly owns a separate property, so this would not be his/her first property.
The location of the parents/child/property are in New York City, USA
Thanks.Last edited by Josher8; 04-14-2009 at 06:46 PM.
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04-16-2009, 12:47 PM #2
Fixer Upper
- Join Date
- Feb 2007
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- 58
If the parents transfer the deed to their child (or anyone else) that would be considered a gift and there would be a gift tax payable by the givers. Or they could apply it to their lifetime exclusion. See a qualified CPA for correct information. The child would take over the parents' cost basis of the house.
The parents can give a partial ownership to the child which would follow the above advice of seeing a qualified CPA and a lawyer to draw up the paperwork.
If the child inherited the house and the parents' total estate was under the minimum amount for the federal "death tax" then the inheritance would be Federally tax free (check your local state laws) AND the house would have a stepped cost basis of what it was worth when the parents passed on. This could save a lot of money in capital gains taxes when the child sells the property.
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