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If I add son to house with a mortgage in mother's name, will there be capitol gains tax or just gift tax?

by pslaughter517 from Killeen, Texas. Aug 29th 2017 Reply

William J Acres (William_Acres)
#73 ranked lender in Arizona - 8,727 contributions

You question is not clear.. so i'll have to assume that you are concerned about passing your home to your children without the tax burden.. First, let me say that you should be contacting an estate planner rather than going to an internet post.. i'm not a financial planner or an estate planner, but I am somewhat familiar with some of the IRS tax codes associated with inheritance, but regardless of that, you need to contact a professional who specializes in estate planning for the most accurate information. That all being said, there are several ways to transfer a home.. you can will it to them.. add them to the mortgage, put the home in a trust, or sell it to them.. Which way is best is a question for the estate planner.. If you will the property, then under current IRS code, if your estate is valued less than $5.49M, then there is no estate tax obligation to the estate.. If the home is willed to your child, then the "Tax Basis" is calculated at the current value at the time of inheritance. If they sell the home immediately after inheriting it, then the property has not increased in value and there is no tax obligation.. If they hold onto the property for a year and then sell it, and lets say it goes up $50K in value, then there would be a "Capital Gain" of $50K and taxes would be due on the $50K.. how much tax owed is based on the scenario of the tax payer.. so it's impossible to say just how much.. Again, for the latest and most accurate information, you need to contact an estate planner. I'm a preferred Lender with California and Arizona being my primary markets. If you or someone you know is looking for financing options, feel free to contact me or pass along my information. 480-287-5714 NMLS# 226347 / RPM Mortgage NMLS 1541014 / AZMB0121893

Aug 30th 2017
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