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Loren, Lawyer
Category: Real Estate Law
Satisfied Customers: 34504
Experience:  30 years of real estate practice experience.
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My 83 year-old parents own their home in the San Francisco

Customer Question

My 83 year-old parents own their home in the San Francisco Bay Area outright, current value ~$1.4M. They have willed their estate to me and my 3 brothers equally. They are relatively healthy but more and more finding it hard to get to DR appts, etc. -life there is now causing stress. I would like them to move to my area east of Sacramento, but they are reluctant to sell the house before they pass because of the tax consequences...they want to pass on the full value of their home. Their boys don't care, but it's important to my folks that they maximize our inheritance. My question - is it possible for them to rent the house out to a 3rd party indefinitely so they can move closer to me w/o incurring negative tax consequences for their estate? The potential rent would more than cover their expenses in my area, so that isn't a concern. Any other possible solutions that could help to address their inheritance concerns?
Submitted: 2 years ago.
Category: Real Estate Law
Expert:  Loren replied 2 years ago.
Thank you for using JustAnswer. I am Loren, a licensed attorney, and I will do whatever I can to answer your question.
Renting out the house will not have any effect on their estate taxes or your inheritance. Though, they will have to declare any rent as income on their annual returns.
I hope this is helpful. If you have more follow up questions please let me know. It is never a problem.
Thank you.