Here the clerk is correct that brother has 1/7 interest and that trust would have to take loan against property and then transfer from the trust st they state.This is complicated here by the seven children that are equitable beneficiaries of the trust.
- The parent-child transfers of Proposition 58 include all types of transfers of title from parents to children or from children to parents. Transfers must occur on or after November 6, 1986, the effective date of the Proposition. They may be in the form of a deed (recorded on or after November 6, 1986) or a court order dated on or after that date.
- Further, this Proposition includes all types of real property owned by the transferor, including all the value of his/her principal place of residence and on the first one million dollars ($1 million) of the enrolled value of all other types of property. A mother and father can combine their exclusion for a limit of $2 million dollars.
Definitions & Terminology
Children: Children include the following: sons and daughters, sons-in-law and daughters-in-law, stepchildren, and children adopted under 18.
Gift-Purchase: Transfers as a gift or purchase between parents and children are excluded with a completed Prop. 58 form.
Principal Residence: Proposition 58 does not require that the parent or child use the transferred property as his or her principal residence. In addition, the $1 million limit does not apply to the transferor's principal residence.
$1 Million Dollar Exclusion: The $1 million exclusion for other property applies for each transferor. Therefore, a mother can transfer $1 million of other property and a father can transfer $1 million of other property for a total combined exclusion of $2 million.
Legal Entities: Generally, transfers directly between legal entities owned by parents and children are not entitled to the benefits of this measure.
Trusts: A transfer to or from a trust is treated just as a transfer to or from the trustor personally, provided the trust is revocable or the trustor retains the present beneficial use, possession, or enjoyment of the transferred property.
Date of Death of Decedent: The date of any transfer between parents and their children under a will or intestate succession is the date of a decedent's death, provided the decedent died on or after November 6, 1986.
"Third Party" Defined: A third party is any person or entity that is not a transferee or transferor in the transfer between the parents and children.
"Transfer of the Real Property to a "Third Party": For filing proposes, a transfer of the real property to a third party occurs when all the real property received is transferred to someone other than an original transferee or transferor. Therefore, a transfer may qualify for an exclusion when a partial interest in the property received is transferred to a third party prior to an application being filed.
Filing Requirements: Current law requires that the claim be filed within three (3) years after the date of the transfer of real property or prior to the transfer of the real property to a third party, whichever is earlier. However, even if a claim is not made within this filing period, a claim is considered timely if it is filed anytime prior to or within six (6) months after the mailing date of a Notice of Supplemental Assessment or Notice of Proposed Escape Assessment, whichever is later. For example if a taxpayer received a Notice of Supplemental Assessment for a parent-child transfer dated January 1, 1994, and then received a Notice of Proposed Escape Assessment dated April 1, 1994, the taxpayer would have six (6) months from April 1, 1994 to file a claim with the Assessor.