Header
 

PARENTS – SHOULD I TRANSFER MY HOME TO MY KIDS TO SAVE TAXES?

Many people think that transferring their home to their children while they are alive saves taxes but does it. Unfortunately, the picture is far more complicated than taxes.

  1. If your child is sued, the house can be sold to satisfy judgments against them.
  2. If your child goes into bankruptcy, the house becomes property of the bankruptcy estate and is subject to liquidation to satisfy the child’s debts.
  3. If your child gets married, or is already married, their spouse can, in some situations, make a claim on the property in divorce proceedings.
  4. If your child dies before you, you will inherit the house, and will be forced to pay inheritance tax on what was your own property.
  5. If you intend to continue to live in your house after it is transferred, and later have a falling out with your child or your child’s spouse you can be put out of the house (if you say, “My child would never…”, think again. It happens all the time).
  6. For tax purposes, if you transfer the house to your child, your child will take the property at your cost basis (price at which you purchased the property plus any capital improvements you made). If your child sells the house, capital gains tax (approximately 20% ) will be due on the difference between your original basis and the net receipts from sale. If your child instead inherits the house, they will pay 4.5% on the equity in the house at time of your death.

ESTATE CASE EVALUATION FORM

First Name: *   Last Name: *
 
     
Email: *    
   
     
Phone:    
Please provide your daytime phone number so we can contact you if we need additional information to complete your free case evaluation.
Day Phone *   Cell Phone
 
     
Your Address Information:
     
City: *   State: *
 
     
Do you currently have a lawyer?   Was there a will?
Yes No   Yes No
     
What type of injuries did you experience?
     
What is the best time/method to reach you? 
     
Please select an inquiry type from this list 
 
Please state your question: *
     
DISCLAIMER and STATEMENT OF NON-CONFIDENTIALITY
Information sent to Pachtman Law Office using this form is protected using standard Internet encryption technology. We will treat this information confidentially; however, submitting this information does not create an attorney-client relationship of any kind. The information on this site is not meant as legal advice nor does it constitute an offer to represent you.
     
     
   
     

Toughlawyers.net is made available as a service to our clients and friends. Articles contained here should be viewed as general commentary on the law and not as substitutes for legal counsel. You should not act on information contained herein without further legal consultation. If you have specific legal questions or needs, please call us at 1-866-86-TOUGH (1-866-868-6844) to talk with us at no charge, or send us an e-mail.
Copyright © 2000 Pachtman Law Office, All Rights Reserved