Property past on thru a will - Posted by Brian

Posted by FJW on April 21, 1999 at 20:07:25:

Johnnie Walker got me excited. Curious though…

Why didn’t you try to get more tax free money by maxing out the LTV or did you opt for the no doc, no qual quickie? Thank you.


Property past on thru a will - Posted by Brian

Posted by Brian on April 20, 1999 at 06:40:18:

I was just wondering if anyone would know the answer to this question. A house was left to my father from his mother in the state of West Virgina. Does he have to do anything else to take title of the property? A local attorney said they (my parents) would have to give it to someone and they would give it back. Sounds like a line of bull to me. I know laws vary from state to state, But if anyone has any info on this type of transaction I would really appreciate hearing your input.

Also I just closed my first deal bought a fannie mae foreclosure. Now to get it rented. Hard to believe its a REO the condition is great. Thanks for all of the valuable information that passes through this site!!!


Re: Property past on thru a will - Posted by Irwin

Posted by Irwin on April 20, 1999 at 21:16:44:

What is it that your father and mother are trying to accomplish? It sounds like your father wants to put his inherited property, which is in his name only, into joint name with your mother. In my state, which IS NOT W. VA, he would just deed it to himself and his wife, husband and wife, and that would create a Tenancy By The Entireties. A long time ago he would have had to deed it to a strawman, (usually the attorney or a secretary) who would then deed it back to him and his wife. Perhaps W. VA still follows this antiquated procdure. Talk to a local lawyer. As I said, what are they trying to accomplish?

Re: Property past on thru a will - Posted by Bill Gatten

Posted by Bill Gatten on April 20, 1999 at 19:38:10:


Your Dad is about to become familiar with some of the true benefits of a Living Trust relative to Probate Adminsitration and Taxes. To avoid probate and taxation on the estate, your dead Grandmother now needs to place the property into a Living Trust (which can be very tricky…called a “Post-Mortem Really Un-Intervivos Trust” (i.e., a “PRUIT Trust,” no relation to Jim, here on our board, of course): thereby naming your father as the Trustee with the power to execute all necessary transfer documents, etc. (read on)…

I just went through this exact same fiasco with my own mother’s house following her death last August. I found that convincing her to execute the Living Trust after her death was much easier than convincing her to do it before she passed away. Her only son being a big deal trust expert had never born any weight (she never got over the time I blew up her TV after my two-week stint in Electronics Trade School right out of High School… course it took the side of the house out too). Her trustworthy attorney, however, had no trouble convincing her that with such paltry assets, and only one heir, a good Will was the only way to go, and that she certainly didn’t need an inter-vivos trust (I suspect it was because he had no clue what one was, much less how to spell it).

The biggest problem in my own case was getting a Notary to go with me to the Mausoleum to acknowledge Mom’s signature (they have to be a pretty good friends to do that… go to the mausoleum). Then, of course, there was the minor problem of the Swearing-In; but I was able to get around that by convincing my Notary friend that Mom was a Deaf Mute (which, of course, was no real stretch at that point). After that, it was a breeze… I refinanced the property and placed it into a PACTrust (of all things) with a nice young couple out of a fresh BK, who could never have afforded a home otherwise; but who love the house, and pay like clock work, and who don’t mind sharing the future appreciation with me (in exchange for the tax write-off and all incidents and benefits of ownership…without Loan qualifying or a large cash outlay).

BTW, I pulled $35,000 out of the house; left $30,000 in it; the young couple gave me $5,000 up front and agreed to payments of $505 per-month above a 1st TD of $300 p/mo. In seven years we’ll sell and split the net profit–following a return of my $30,000. If I had sold it outright, I would probably have taken $50 or $55K; then after costs and taxes, ended up with little more than what I borrowed out (tax free). But this way, I sold it for $10K more; I have a whole bunch’a money in my pocket; a whole bunch left over; and a shot at seven more years of “beautiful, and refreshing” California appreciation… while someone else pays all the bills, and manages my “income property” for me–for free. And, if there is no appreciation… what do I lose?

But, hey… it’s too good to be true; it’ll never work; it’s not for everyone; it’s too complicated; and Lease Options are better. What can I say (…then some guy here talks about buying used cars at a discount and re-selling them at book value… why can’t I ever think of the “good” stuff?).


Re: Property past on thru a will - Posted by Brad Crouch

Posted by Brad Crouch on April 20, 1999 at 14:47:25:


I think you’re gonna have to talk with a lawyer. But be careful of tax consequences.

When a property is “given”, the amount over $10,000 is taxable (on the “givor”, I believe). When the property is “given back”, there are taxes due again. Hugh taxes! Be careful . . . talk with a lawyer who has the facts, not just an idea.


As the Scott comedian Billy Connolly would say… - Posted by FJW

Posted by FJW on April 21, 1999 at 17:15:51:


I think a light just went on. Is this possibly how you use a PACTrust with a free & clear property? ie.“How would you like ? thousand dollars tax free, MRs. Seller?”

In your example, how much interest tax write off would the resident beneficiary be entitled to, since the loan is only around 50% to 60%? It seems that the higher the loan LTV, the more attractive it is to someone accustomed to renting, as far as selling the tax write off goes. Thank you.


Re: As the Scott comedian Billy Connolly would say… - Posted by Bill Gatten-

Posted by Bill Gatten- on April 21, 1999 at 19:13:26:

OK… you got it!

The actual tax write-off is limited to the actual interest that can be proven. However, in a free and clear property the payment stream can be based upon an interest bearing note. The note is executed by the resident beneficiary (it needn’t be secured by the Realty, so long as it can, under scrutiny, be shown as “purchase money,” and all other Qualified Residence requirements are met.

As far as the non-resident is concerned, the income from the payment stream which is over and above any mortgages on the property, is taxable anyway (so, 'might as well create a note).


PS, It would appear that your friend Billy Connolly’s typewriter is throwing out some wierd characters.