Has anyone here.... - ProTeacher Community




      
Home Join Now Search My Favorites
Help


      Teachers' Lounge


Has anyone here....

>

Reply
 
Thread Tools
lisa53's Avatar
lisa53 lisa53 is online now
 
Joined: Apr 2015
Posts: 6,992
Senior Member

lisa53
 
lisa53's Avatar
 
Joined: Apr 2015
Posts: 6,992
Senior Member
Has anyone here....
Old 01-27-2021, 07:32 AM
  #1

Has anyone ever given your house to another person (a grown child, perhaps) as a gift?

Or have you ever been given a home by your parent (or another relative)?

Backstory: I have been renting my old house to my dd and her dh. They now have baby Jai. I was going to put the house in my will for them, but I would like to give it to them now for two reasons:

1. If I ever needed long term care and had to go on Medicaid, I would be required to sell it, and they might not have the means to buy it.

2. It's a two story house. Because of Jai's disabilities, they may eventually need a house with a bedroom for him on the first floor, appropriate bathroom modifications, wide doorways, and handicap access. I would like them to be able to sell the house in order to buy what they need.

Just trying to figure out if there are big tax ramifications if I do this. I have done some research, and I think it's possible to do without issues (house is worth about 200K), but I may be missing something.


lisa53 is online now   Reply With Quote

tctrojan's Avatar
tctrojan tctrojan is offline
 
Joined: Nov 2012
Posts: 5,323
Senior Member

tctrojan
 
tctrojan's Avatar
 
Joined: Nov 2012
Posts: 5,323
Senior Member

Old 01-27-2021, 07:38 AM
  #2

I would see an attorney who specializes in these type of things. I know at one time there had to be so many years between a gift like that and receiving Medicare. You are wise and kind to consider this. Do you have other children? Would gifting something like this cause resentment?
tctrojan is offline   Reply With Quote
amiga13's Avatar
amiga13 amiga13 is online now
 
Joined: Feb 2014
Posts: 21,983
Senior Member

amiga13
 
amiga13's Avatar
 
Joined: Feb 2014
Posts: 21,983
Senior Member

Old 01-27-2021, 07:43 AM
  #3

I agree with checking with your attorney, financial advisor, and and tax expert. I don’t think it should be a problem, but better safe than sorry.
amiga13 is online now   Reply With Quote
lisa53's Avatar
lisa53 lisa53 is online now
 
Joined: Apr 2015
Posts: 6,992
Senior Member

lisa53
 
lisa53's Avatar
 
Joined: Apr 2015
Posts: 6,992
Senior Member

Old 01-27-2021, 07:49 AM
  #4

tctrojan, It's 5 years, and Medicaid, not Medicare. I would only need Medicaid if I needed long term care and exhausted my other assets. I am already on Medicare. I'm 68, so hopefully I won't need long term care in the next 5 years.

I do have other kids. They know I planned to give dd the house in my will, and dd knows that if I give it to her now, she just got that part of her inheritance early. I went over my will with everyone and they agreed it was fair. The others do not have "special needs", and they know from past experience that I would help them if they did and I was able.
lisa53 is online now   Reply With Quote
Lilbitkm's Avatar
Lilbitkm Lilbitkm is online now
 
Joined: Aug 2010
Posts: 2,938
Senior Member

Lilbitkm
 
Lilbitkm's Avatar
 
Joined: Aug 2010
Posts: 2,938
Senior Member

Old 01-27-2021, 07:50 AM
  #5

You can do a quitclaim deed and deed them the house. If the home is not paid off they will still need to take over your loan.




I bought my home from my father but I purchased it from him and he “gifted” me the equity he had in it for my down payment and to avoid PMI so I still have a mortgage. There were no tax implication on the money gifted for either of us.

You can “gift” millions of dollars in your lifetime without federal ramifications.
https://www.nerdwallet.com/article/taxes/gift-tax-rate


Lilbitkm is online now   Reply With Quote
lisa53's Avatar
lisa53 lisa53 is online now
 
Joined: Apr 2015
Posts: 6,992
Senior Member

lisa53
 
lisa53's Avatar
 
Joined: Apr 2015
Posts: 6,992
Senior Member

Old 01-27-2021, 07:53 AM
  #6

lilbitkm, I own the house free and clear. It would actually be nice for me to not have the responsibility of owning it!
lisa53 is online now   Reply With Quote
Lilbitkm's Avatar
Lilbitkm Lilbitkm is online now
 
Joined: Aug 2010
Posts: 2,938
Senior Member

Lilbitkm
 
Lilbitkm's Avatar
 
Joined: Aug 2010
Posts: 2,938
Senior Member

Old 01-27-2021, 07:56 AM
  #7

Without a mortgage, you can easily do a quitclaim deed then! Very easy, just the filing that needs to happen. In my state you have to put down a “sale price” and most people will just put $1.


https://www.investopedia.com/article...laim-deeds.asp


https://www.legalzoom.com/articles/w...quitclaim-deed
Lilbitkm is online now   Reply With Quote
luvmycat's Avatar
luvmycat luvmycat is online now
 
Joined: Aug 2007
Posts: 4,368
Senior Member

luvmycat
 
luvmycat's Avatar
 
Joined: Aug 2007
Posts: 4,368
Senior Member

Old 01-27-2021, 08:30 AM
  #8

There is a tax form for you to fill out for the gift. When you pass, the value gets added to your estate and will be taxed according to the inheritance tax at the time of your death.
luvmycat is online now   Reply With Quote
lisa53's Avatar
lisa53 lisa53 is online now
 
Joined: Apr 2015
Posts: 6,992
Senior Member

lisa53
 
lisa53's Avatar
 
Joined: Apr 2015
Posts: 6,992
Senior Member

Old 01-27-2021, 08:53 AM
  #9

Luvmycat, NH is the “Live free or die” state. In fact, we live free even after we die! No inheritance tax here.. My estate will be far too small to qualify for federal estate taxes.
lisa53 is online now   Reply With Quote
luvmycat's Avatar
luvmycat luvmycat is online now
 
Joined: Aug 2007
Posts: 4,368
Senior Member

luvmycat
 
luvmycat's Avatar
 
Joined: Aug 2007
Posts: 4,368
Senior Member

Old 01-27-2021, 08:58 AM
  #10

Great! There should be no issues then. I would still speak to an estate lawyer to make sure it is fair to all siblings.


luvmycat is online now   Reply With Quote
sonoma's Avatar
sonoma sonoma is offline
 
Joined: Sep 2010
Posts: 2,737
Senior Member

sonoma
 
sonoma's Avatar
 
Joined: Sep 2010
Posts: 2,737
Senior Member

Old 01-27-2021, 09:27 AM
  #11

There would be little tax impact on you but it could mean major tax implications for your daughter.

If she inherits the house she would receive the stepped up basis that would eliminate or greatly reduce capital gains tax if she sells.

If she is gifted the house she would pay capital gains tax when she sells and if you have owned the house for many years this could be significant.

Also, I know New Hampshire has high property taxes. You need to check to see how this would affect her tax obligation since it is not a transer of primary residence.

I recommend meeting with a real estate attorney.
sonoma is offline   Reply With Quote
lisa53's Avatar
lisa53 lisa53 is online now
 
Joined: Apr 2015
Posts: 6,992
Senior Member

lisa53
 
lisa53's Avatar
 
Joined: Apr 2015
Posts: 6,992
Senior Member

Old 01-27-2021, 10:16 AM
  #12

Sonoma, i did look up the capital gains situation. I think they would not have a problem, since a couple only needs to pay capital gains on amounts over 500K.

As far as I know, they would have to pay the same property taxes that I pay now (which is included in their rent). Since they rent on a cost only basis it should not be a problem.

I will, of course, consult a lawyer, just in case I am missing anything.
lisa53 is online now   Reply With Quote
mhugs mhugs is offline
 
Joined: Jul 2008
Posts: 13,316
Senior Member

mhugs
 
Joined: Jul 2008
Posts: 13,316
Senior Member
house
Old 01-27-2021, 02:43 PM
  #13

I'm thinking about Jai's medical care. Would them owning a home make them loose benefits for his medical coverage? Not sure how that works in our state? I see your intent and it makes sense.
mhugs is offline   Reply With Quote
steach steach is offline
 
Joined: Jul 2006
Posts: 1,195
Senior Member

steach
 
Joined: Jul 2006
Posts: 1,195
Senior Member
Life estate
Old 01-27-2021, 06:40 PM
  #14

I have a life estate in my mother’s home. Her house is in both our names and she resides there just as before. However, when she passes the house will go to me. She basically “gave” me the house and she retained the right to live there.
steach is offline   Reply With Quote
MissESL MissESL is offline
 
Joined: May 2009
Posts: 3,221
Senior Member

MissESL
 
Joined: May 2009
Posts: 3,221
Senior Member
House
Old 01-27-2021, 07:29 PM
  #15

What about putting it in a trust?

My grandparents did that after they paid their mortgage because it protected the property after their death - it couldn’t be used to pay off debt or taken away in this manner. Family members continued to use the house until the last one retired. Then, as the “heirs” they were able to dissolve the trust and sell the house at quite a gain, which has been a godsend in these uncertain times.

There is a small man agent fee annually, I think, for the life of the trust, but this method really worked well for our family.
MissESL is offline   Reply With Quote
Ruby tunes's Avatar
Ruby tunes Ruby tunes is online now
 
Joined: Sep 2012
Posts: 4,253
Senior Member

Ruby tunes
 
Ruby tunes's Avatar
 
Joined: Sep 2012
Posts: 4,253
Senior Member
Your house
Old 01-27-2021, 09:12 PM
  #16

Have you considered what would happen if Baby Jai were to die? Very sad to think about, but if that happened, would your other children still be OK with your decision about who inherits the house?
Ruby tunes is online now   Reply With Quote
Lilbitkm's Avatar
Lilbitkm Lilbitkm is online now
 
Joined: Aug 2010
Posts: 2,938
Senior Member

Lilbitkm
 
Lilbitkm's Avatar
 
Joined: Aug 2010
Posts: 2,938
Senior Member

Old 01-28-2021, 05:41 AM
  #17

Was going to suggest a trust as well...
Lilbitkm is online now   Reply With Quote

Join the conversation! Post as a guest or become a member today. New members welcome!

Reply

 

>
Teachers' Lounge
Thread Tools




Sign Up Now

Sign Up FREE | ProTeacher Help | BusyBoard

All times are GMT -8. The time now is 03:46 PM.

Copyright © 2019 ProTeacher®
For individual use only. Do not copy, reproduce or transmit.
source: www.proteacher.net
16