Our house is currently under mom, dad, brother and myself. Parents' have a trust that says brother and I get the house when they pass. If they take brother and my name off the deed, are there different tax implications (i.e. estate tax) when they pass? Reason they want to take our names off the deed: real estate taxes are less without our names on deed
State/Country relating to question: Hawaii
bank says to get a quit claim deed to change title but want to check tax implications first
Oh yes, there is a major tax difference if the children's names are XXX XX the deed.
As it stands, you inherit the house on your parent's death, the house will pass to you outside of any will because you ar already an owner. If you were to sell the house after their death, and since you have been an owner by gift, the capital gain is based on the cost that your parents paid way back when.
On the other hand, if you inherit the house as a result of their death and you are NOT on the deed when they pass, the cost basis is "bumped up" to the value on the date of death.
So when you sell it, your capital gain will be less (assuming the value of the house is worth more when your parents pass away than when they bought it)
Ok, let's say we don't sell the house. If we are on the deed vs. inherit through trust/will--what is the difference in taxes we will end up paying. None vs. ?
Estate tax will only apply, under 2012 law, if your parents both die and have more than $5Million in their estate.
Is this your case?
surely not..... : )
less than $5 million, we don't pay estate tax ONLY IF we are on the deed? If we are not on the deed and their estate is less than $5 million--do we still pay estate tax?
We are not on the deed, parents pass away and estate is less than $5 million, we do NOT pay inheritance tax?
If you are on the deed already, then the property can pass outside the estate because you already legally own it.
If you are NOT on the deed, then the property passes through the estate and if the total estate is over the limit, the estate has a tax bill nefore you get clear title.
thank you. RU an attorney in Honolulu that can do a quit claim deed for my parents to take our names off their deed?
I am not an attorney, nor is our service allowed to solicit your business directly nor provide you with any recommendations in specific. You may wish to Google the Hawaii Bar Association website and it likely has an attorney referral service.
thank you : )
CLosing this question. Thanks.
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