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N Cal Attorney
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I am a CPA with a client-husband/wife mid 60s-They have a Fed-S

Customer Question

I am a CPA with a client-husband/wife mid 60s-They have a Fed-S Corp., organized in NJ and had property there but transferred it to a NJ LLC some years ago. They also have a beach house in Amagannsett, LI-NY which is in this corporation since 1990 as well and is now the only asset in the corp. They have rented it out for many years during the summer and depreciated it down to a basis of only $95k. They are now retired and have two adult children who are quite responsible people. The property is now their summer home as they have sold their business interests in NJ and purchased a condo apartment for 2.2mil in NYC. As they will now NOT be renting out the LI property any more and it has a low basis, I suggested considering a family trust where they contributed the property to the trust using part of their gift tax exemptions of which they have never done so. This is not my area of expertise but I need to advise them on the tax consequences. Please Help me if possible! Elliott Wexler CPA
Submitted: 2 years ago.
Category: Business Law
Expert:  Fran-mod replied 2 years ago.
Hi, I’m a moderator for this topic and I wonder whether you’re still waiting for an answer. If you are, please let me know and I will do my best to find an Expert to assist you right away. If not, feel free to let me know and I will cancel this question for you. Thank you!
Customer: replied 2 years ago.

dear fran:

 

sorry but it's tax season and I haven't had a chance to look at mail. My query this week was about family trusts and swhat consequences would result from donating a beach house in Long Island worth over 2 million (but ony 90k left of basis) to the trust. The use of the gift tax exemption etc. was involved and I still would like to converse on it!

Expert:  Fran-mod replied 2 years ago.
Sometimes, finding the right Expert can take a little longer than expected and we thank you greatly for your understanding. We’ll be in touch again shortly.
Expert:  N Cal Attorney replied 2 years ago.
They need to consult an estate planning attorney who can set up the trust and advise them of the tax consequences of different courses of action.

They can get a free consultation from some of the estate planning attorneys listed by location at
http://lawyers.findlaw.com/lawyer/practicestate/Estate-Planning/New-Jersey
or
http://www.nolo.com/lawyers/estate-planning/new-jersey/

Another option normally would be to add the children to the deed as joint tenants, but that will not be an option if title is held in the name of the LLC and not by the parents as individuals.

Another way to go would be to have them write wills leaving the shares in the LLC to the children. That might have the fewest tax consequences but I cannot know that for certain with the limited information you posted.

This situation is complicated enough that it truly merits a consultation with an estate planning lawyer in person. All we can do here is answer questions, we cannot give legal advice or recommend a specific course of action. There are definitely several ways to approach the situation, and only a local attorney can advise them which way is best for their particular circumstances.

I hope this information is helpful.

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