Posted on: 19th Mar, 2010 01:21 pm
Bear with me. This might be a weird one.
My parents were married and lived in the same home for over 30 years. At one point during the marraige they almost divorced and my mother quitclaimed her interest in the house to my father. They ended up working things out and staying together but the house remained in my father's name only. When he died a few years ago, he left me as the sole beneficary. That means, of course, that the house became my property. The will was probated and the house is now officially in my name. I know that seems odd, but it was done because my father was worried about my mothers ability to handle finances and was convinced that she would end up homeless if there wasnt something in place to ensure that she couldnt be tricked into some bad deal that would cost her a paid-off house.
Here is where my question comes in. She recently remarried and she wants to get a house with her new husband. They want to sell his house and the house she lives in and buy new place and put the money that will be left over into the bank. Due to promises I made to my father, the most I told her that I could do would be sell my house and give her half of the value. She is fine with that.
My parents were married and lived in the same home for over 30 years. At one point during the marraige they almost divorced and my mother quitclaimed her interest in the house to my father. They ended up working things out and staying together but the house remained in my father's name only. When he died a few years ago, he left me as the sole beneficary. That means, of course, that the house became my property. The will was probated and the house is now officially in my name. I know that seems odd, but it was done because my father was worried about my mothers ability to handle finances and was convinced that she would end up homeless if there wasnt something in place to ensure that she couldnt be tricked into some bad deal that would cost her a paid-off house.
Here is where my question comes in. She recently remarried and she wants to get a house with her new husband. They want to sell his house and the house she lives in and buy new place and put the money that will be left over into the bank. Due to promises I made to my father, the most I told her that I could do would be sell my house and give her half of the value. She is fine with that.
continued
I have been researching quitclaim deeds and I can't figure out what to do. If the house is worth 150,000, should I quitclaim the house into her name for 75,000? What would be the tax implications considering that the house is, according to my fathers will, part of my inheritance? Would my mother get clobbered on taxes since she bought a house for half of what its worth then turned around and sold it for its full value? I know that my mother wants me out of the equation so that her and her new husband can get on with their lives. They respect the position that Im in due to promised made to my father. They are very happy with the prospect of getting half the value of the house. What is the easiest way to get this accomplished without me and/or my mother getting killed by the tax man?
Just so you know, we live in Texas. The house is fully paid for with no liens of any kind. If anyone actualy made it through my 2 part novel, I thank you for your patience and look forward to hearing from you....
I have been researching quitclaim deeds and I can't figure out what to do. If the house is worth 150,000, should I quitclaim the house into her name for 75,000? What would be the tax implications considering that the house is, according to my fathers will, part of my inheritance? Would my mother get clobbered on taxes since she bought a house for half of what its worth then turned around and sold it for its full value? I know that my mother wants me out of the equation so that her and her new husband can get on with their lives. They respect the position that Im in due to promised made to my father. They are very happy with the prospect of getting half the value of the house. What is the easiest way to get this accomplished without me and/or my mother getting killed by the tax man?
Just so you know, we live in Texas. The house is fully paid for with no liens of any kind. If anyone actualy made it through my 2 part novel, I thank you for your patience and look forward to hearing from you....
Hi Tommy,
As your name is on the property deed, you are the sole owner of the property. You can sell off the property now and pay off half of the sale price to your mother as per your father's wishes. However, this would be considered as a gift from your end to your mother and you would be liable for paying gift taxes if you cross the exemption limits.
As your name is on the property deed, you are the sole owner of the property. You can sell off the property now and pay off half of the sale price to your mother as per your father's wishes. However, this would be considered as a gift from your end to your mother and you would be liable for paying gift taxes if you cross the exemption limits.
@Adonis
I can't just sale the house right now because they are living in it while they are shopping for a new place. Instead of dragging it out, I was trying to figure out the best way to get out of the equation as far as they are concerned. Assuming that they could write me a check for half the value of the house, I am trying to figure out which would make the most sense taxwise. If I quitclaim it to her for half its value, I would be fine but I wonder if she would get clobbered when she sales it a few months down the line for twice what she paid for it. One friend kinda in the biz told me I could quitclaim it for nearly nothing to her and accept a gift check from her for half the value. In that case, it would exceed the 13,000 yearly gift limit. I know there is a lifetime gift exclusion of up to 1,000,000. i just don't know how that works, or for that matter, which one of those two choices makes the most sense. They feel somewhat constrained in their home search with me having to constantly be in the equation. I want to take care of that without breaking any promise to my father or having myself or my mother raked over the coals by the taxman.
I can't just sale the house right now because they are living in it while they are shopping for a new place. Instead of dragging it out, I was trying to figure out the best way to get out of the equation as far as they are concerned. Assuming that they could write me a check for half the value of the house, I am trying to figure out which would make the most sense taxwise. If I quitclaim it to her for half its value, I would be fine but I wonder if she would get clobbered when she sales it a few months down the line for twice what she paid for it. One friend kinda in the biz told me I could quitclaim it for nearly nothing to her and accept a gift check from her for half the value. In that case, it would exceed the 13,000 yearly gift limit. I know there is a lifetime gift exclusion of up to 1,000,000. i just don't know how that works, or for that matter, which one of those two choices makes the most sense. They feel somewhat constrained in their home search with me having to constantly be in the equation. I want to take care of that without breaking any promise to my father or having myself or my mother raked over the coals by the taxman.
Hi lifer,
If you want to avoid paying the gift taxes, then you can go for the lifetime gift tax exemptions. You can contact a tax expert and he would be able to help you understand how the whole thing works.
Thanks
If you want to avoid paying the gift taxes, then you can go for the lifetime gift tax exemptions. You can contact a tax expert and he would be able to help you understand how the whole thing works.
Thanks