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Mark D
Mark D, Enrolled Agent
Category: Tax
Satisfied Customers: 989
Experience:  MBA, EA, Specializing in Business and Individual Tax Returns and Issues
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My Mother has a living trust specifying her Grandson that has

Resolved Question:

My Mother has a living trust specifying her Grandson that has taken care of her and her home for the past 17 years is to be able to purchase her home for $80,000. at 1% interest over 10 years. She is worried about Calif. state taxes being increased to current value about $350K and him not being able to keep the home. She is willing to transfer home to him now at no charge if that will save taxes from going up. What would be best way to keep current tax base on home and save on Federal and State income taxes for her Grandson?
Submitted: 4 years ago.
Category: Tax
Expert:  Mark D replied 4 years ago.
Paul,

What county are you in?

Regards,

Mark D
Customer: replied 4 years ago.
Los Angeles, County
Expert:  Mark D replied 4 years ago.
Paul,

Last question, are the parents of the grandson deceased?

Regards,

Mark D
Customer: replied 4 years ago.

Parents of grandson and other children are living. The trust specified for Grandson to get house she will change trust or sell home to grandson in advance of death if necessary. All children are aware of the grandson getting the home and have no objections.

Expert:  Mark D replied 4 years ago.
Paul,

In order for the property to retained its assessed value, the property would have to be transferred (before or after death) to the grandson's parents as they are alive. Later on, the parents can transfer the property to the grandson. You must be careful are transactions that happen closely together could be seen as a step-transaction and the value would be reassessed. The county gives no particular time frame that is needed to hold the title, so this one is tricky. However, to answer you original question, no direct transfer between your mother and the grandchild would be exempt from reassessment since the parents are not deceased. Please let me know if you have any questions.

Regards,

Mark D
Mark D, Enrolled Agent
Category: Tax
Satisfied Customers: 989
Experience: MBA, EA, Specializing in Business and Individual Tax Returns and Issues
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