We have a single family rental dwelling in California that is owned 27% by my wife and I in a Living Trust and 73% by a tax-exempt generation-skipping trust created by my wife's mother in which my wife is the Trustee and chief beneficiary our two sons are the secondary beneficiaries. We would like to transfer the 73% ownership in the tax-exempt trust to ourselves and replace the value with mutual fund shares held by our living trust. Both our living trust and the tax-exempt trust have accounts with Vanguard , so I think we can just move shares from our account to the tax-exempt trust account without selling the shares. Our questions are: 1. How to do this with minimal tax consequences? 2. What will be the tax consequences? 3. Can we document that the financial consideration for the transfer is nominal, say only $100, and separately, at another time, just move the shares from one trust to the other without connecting it to this transaction when we record the Grant Deed?
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