Re: need to take my dad off title to home - Posted by Frank Chin
Posted by Frank Chin on July 03, 2003 at 09:30:43:
First, I’m not a CPA or attorney, but we done gifting within the family.
Gifting is tied in with many other things like estate taxes, and you didn’t provide enough information here.
Here’s what you have to consider:
One person can gift another person 11K per year.
If he’s taken off the deed - he’s gifting his portion to you, not the other way around. He’s the one subject to gift taxes.
The amount of the gift is the EQUITY of the property. So its the appraised value less the mortgage. For example, if FMV is 200K, there’s a 160K mortgage, his half of the equity is 20k. He can then gift it to you over 2 years via a note arrangement.
The more efficient way is for him to gift both to you and husband, 11K per year EACH. In this example, a 20K equity can be gifted tax free in one year, @10K per person, totalling 20K.
4- If his name and yours appear on the deed, here in NYC, it is presumed that each owns 50%. I had owned property in MA with relatives where the percentage ownership is written into the deed. We done this with gifting later on in mind.
5- The other factor to consider is your dad’s estate. Gifting can be done over the 11K tax free per year I mentioned, but the gift reduces the unitary credit, I beleive its currently $1,000,000, beyond which estate taxes are due. If he does not have much or any estate, then he can gift the whole amount without much consequence.
In other words, if he’s on the deed for a two million free and clear home, gifts you his $1,000,000 half, all of his assets are subject to estate tax at death, as he used up the credit. But if he’s got no other assets, then no problem.
But the estate tax is due for a phaseout in 2010, with changes every year in between.
6- It might be worth it to get an appraisal. I know someone, a retired restauranteur, who gifted some Rentals to his daughter back in mid 1990’s. The state asked him a few months ago to provide an appraisal of the property. He had to go out and get one done for the year in question. He tells me the state is satisfied with the appraisal.
7- I had appraisals done for gifting only, which I paid for, and asked the appraiser to give me the lower end number. This may not work if you’re doing it in conjunction with a refi, and you need a higher number.
Hope this helps.