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Author: 2gifts Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 121585  
Subject: Re: transfer of house title Date: 10/7/2013 10:58 AM
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2) So my wife and SIL hopefully won't have to pay inheritence taxes at the time of her death.

Exemption amount for 2013 is $5.25 million. If she is worried about item 1, then item 2 shouldn't be a problem.


And, of course, Item 2 ignores the fact that by gifting the house to them, they inherit her basis, and so will owe capital gains taxes when they sell vs. inheriting the house at the stepped-up basis, and if the entire estate is below that threshold, no taxes would be owed.

So it's possible that she is actually creating a tax liability where there was none before by doing this.

Glad she is going to see an attorney to help her make appropriate plans.
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