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I live in California. I own a house, joint tenants with ...

I live in California....
I live in California. I own a house, joint tenants with right of survivorship with my parents. I am an only child. My parents now want to put the house 100% in my name. What is the best way to do this to avoid property tax increases, other taxes, etc.? Do they gift it to me? Sell it to me for $1.00 ? What is the best way?
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Answered in 21 minutes by:
5/1/2008
Merlo
Merlo, Accountant
Category: Tax
Satisfied Customers: 9,783
Experience: 25+ years tax consulting. Specializing in returns for US citizens living abroad
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HelloCustomer

Your parents can simply sign a quit claim deed and file that with your local county government. These forms can be easily purchased from any store such as Office Max, etc. and will cost you nothing, other than a small filing fee that your county office may charge.

They would essentially be gifting their share of the house to you, however, as long as that is not worth more than $1 million, you will not be subject to any taxes. You should, however, file Form 709 with your next tax return just to report the transaction.

If this answer has been helpful, please press the "accept" button. Positive feedback is also greatly appreciated. Thanks for the question and have a great day.

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Customer reply replied 9 years ago
Reply to Merlo's Post:

Hi Merlo,

The house is worth approximately $1,300,000

If the total value of the house is $1.3 million, then your parents' current interest in the home is half of that, or approximately $650,000 that they would be gifting to you. This still puts you well under the $1 million lifetime exclusion to which you are entitled. Now at some point down the road if your parents give you additional gifts or if you inherit substantial assets from them, then you would have to add those additional gifts and/or inheritances to the $650,000 that was already gifted to come to a new total. If you then exceed the $1 million exclusion, you may be subject to taxes on the excess amount.

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Customer reply replied 9 years ago

Cool Merlo...so if we file the quitclaim, does that trigger an increase in property taxes?

Any my lifetime $1mm exclusion is not dependent on my age, correct?

The quit claim deed should not trigger a tax increase because there will be no dollar amount even shown on that deed. And the lifetime exclusion of $1 million is for everyone and is not dependent on your age. That $1 million is the current exemption amount and may increase in future years.

Merlo
Merlo, Accountant
Category: Tax
Satisfied Customers: 9,783
Experience: 25+ years tax consulting. Specializing in returns for US citizens living abroad
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Category: Tax
Satisfied Customers: 9,783
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