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Me and my mother were listed as JOINT TENANTS on a home. She

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recently deceased, and the deed...
Me and my mother were listed as JOINT TENANTS on a home. She recently deceased, and the deed has been changed to my name only. I have the option to file a CLAIM FOR REASSESSMENT EXCLUSION FOR TRANSFER BETWEEN PARENT AND CHILD. I want to find out if there are anyany negative implications in the state of California if apply for this right (PROP. 58). I understand my property taxes may go up if I do not take advantage of this exclusion and my home is reassessed. My home is worth double the original purchase price. My question does this affect my tax liability on the joint share of the transfer, meaning will taking advantage of this exclusion impact the amount of money that will be counted as income if I were to sell the house?
Submitted: 9 years ago.Category: Tax
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Answered in 16 minutes by:
9/2/2008
Tax Professional: Merlo, Accountant replied 9 years ago
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

 

Filing for the claim for reassessment for transfer between parent and child will have absolutely nothing to do whatsoever with your tax liabilities when you sell the home.

 

When you do sell the home, you will also be entitled to an exclusion amount on the gain, if you have also used the home as your primary residence. The current rules for that exemption are that you must have owned the home for at least two years and you must have lived in the home for 2 of the past 5 years. If you satisfy those 2 requirements, then when you sell the home you are allowed to exclude $250,000 (or $500,000 if you are married filing a joint return) from the gain before any amount is taxed.

 

Those rules will be changing somewhat effective 1/1/09 and you will only be allowed a prorated portion of that credit based on the number of years you actually lived in the home.

 

However, your claim for reassessment will not affect this in any way whatsoever.

 

If this has been helpful please press the Accept button. Positive feedback is also appreciated.

 

Thank you.

 

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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