Posted by Jay on August 03, 2003 at 11:22:03:
Thank you!
Transfer of title - Posted by Judith Francois
Posted by Judith Francois on July 21, 2003 at 09:04:57:
My parents want to transfer title of their home to me. What would the process be to doing that and what are the ramifications etc. to having them do that?
Re: Transfer of title - Posted by Dave Murray, Ohio CPA
Posted by Dave Murray, Ohio CPA on July 21, 2003 at 16:05:44:
There is also likely to be a gift tax issue on a transaction of this nature. Any gift worth over $11,000 ($22,000 per couple) to an individual needs a Form 709 filed and may be taxable if the donor’s lifetime exclusion is used up.
Re: Transfer of title - Posted by John Merchant
Posted by John Merchant on July 21, 2003 at 11:50:52:
They would give you a Deed to transfer their title to you. Ramifications? It would be your property as soon as they deed it to you.
Probably, to do it right, I’d recommend to them that they have a lawyer do this, so they could set it up so as to completely protect them. They might use a Deed with a reservation of a life estate to themselves, if this is their plan. This would protect them against your later deciding to evict them as squatters, etc.
I sure wouldn’t let any clients of mine deed to their kids without such a reservation of interest to protect themselves. Oh, you wouldn’t evict them? Such a thing couldn’t happen? Well, I’ve sure seen it done and what a he!! of a mess is created, and of course family relations are totally destroyed.
Any conveyance (deed) now would have the merit of avoiding the necessity of a probate proceeding after the death of one or both of them. Probate is a LOT more expensive than a deed, and if this is the only RE they own, probably no other need for any probate after they deed you the house.
Re: Transfer of title - Posted by Judith Francois
Posted by Judith Francois on July 21, 2003 at 12:01:39:
I guess by ramifications I also meant any tax consequences?.. will I have to pay my parents to have the deed transferred (i.e. they still owe a mortgage on the property)?.. would their bank allow such a transaction?.. would the bank have to be involved in the transaction?
Re: Transfer of title - Posted by John Merchant
Posted by John Merchant on July 21, 2003 at 12:28:37:
will I have to pay my parents to have the deed transferred (i.e. they still owe a mortgage on the property)?
Whoa! You & your parents need to think this thing through, and they should get their own lawyer involved to help you all work it through so it’s done right.
As for the mortgage, whereas a mortgage is usually not assumable by a 3d party, a child is normally allowed to assume it (parents still owe it although you might be agreeing to pay it, so they should understand they’re still on the hook).
Certainly you’d be agreeing to pay the rest of the payments, right? Plus whatever you all would work out as for your paying them for what they own. Unless it’s a pure gift of their equity without your paying anything to them for their ownership interest.
… would their bank allow such a transaction?.. would the bank have to be involved in the transaction?
I just answered these questions, but again: Probably & Yes.
Re: Transfer of title - Posted by Judith Francois
Posted by Judith Francois on July 21, 2003 at 12:39:16:
Thank you. I think that the alternatve we were looking at would be to not have any consideration paid for the transfer of title (i.e. it would be a gift on their part)and I would continue to pay the mortgage… could the matter be simply accomplished by having them transfer the deed to me?.. again, any tax consequences?
Re: Transfer of title - Posted by John Merchant
Posted by John Merchant on July 21, 2003 at 15:04:08:
As I said, they’d just deliver to you a new deed to the property. Tax consequences zero for them, except they would lose their deductions and depreciation; for you, you’d get depreciation & deductions as the property owner.
“transfer of their deed”…no such thing. New deed is delivered when selling or giving RE.
Re: Transfer of title - Posted by Jay (NY)
Posted by Jay (NY) on August 03, 2003 at 09:26:00:
Hi,
Just wondering, if you own a corporation that owns real estate, do you have to deliver a new deed to sell the real estate or can you just sell the corp.?
Also, if you sell the corp. with real estate in it, do you have to pay capital gains just like you sell real estate in your own name? TIA
Re: Transfer of title - Posted by John Merchant
Posted by John Merchant on August 03, 2003 at 10:26:24:
You raise two issues:
1.Can you sell the corp. or give a deed? Yes, either. If the corp. owns the title, then ownership of your corp. would of course include all its assets.
2.What are the tax consequences of selling a corp? I presume you mean selling your stock, which is a tax issue, and since I’m not the tax guy, you should run this by John Hyre or your tax guy.