Message Font: Serif | Sans-Serif
 
UnThreaded | Threaded | Whole Thread (10) | Ignore Thread Prev Thread | Prev | Next | Next Thread
Author: acm4tax 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 121105  
Subject: Re: Parents house Date: 6/16/2001 12:26 AM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 1
I caution you about relying on "free" advice on this board or any other place, because you cannot rely upon it when your transaction gets discovered by the IRS. But if you pay a professional for his/her advice you can rely on it and at least avoid the negligence penalty.

Although you cannot use any advice on this board to minimize potential penalties, you can get a written response from IRS by asking your tax law question on their website: http://www.irs.ustreas.gov/help/newmail/user.html

Any written responses from them should be printed and saved with your paperwork for future use if necessary. This will support your claim that you relied on advice from IRS, hence no penalty if you are deemed to owe additional tax.

Personally, I would deem the transfer as a gift. As a gift, your basis will be their basis so you should ask them for their cost and the cost of all improvements they've made. I would also look into your state rules on medicare support for your parents if your name had just been added with their names on the property instead of removing their names.

If all three of your names had been put on the deed of record, then you'd be entitled to stepped up basis at the time of their death (tax law). Your state (each state has their own rules) could put a lien on the property for medicare support provided which would be settled when the property is sold (civil law). This might be less costly than the taxes that will due if you report a gain of everything except $1. If all three names had been put on the deed, then no gift tax return would be due.

Since there is a big difference between civil law and tax law regarding your parents' transfer of property to you, I'd address your question to IRS to get a written opinion first. Then you might check with a real estate attorney who could advise you about reversing any damage that might have been done by your parents' advisor.

I hope you follow up on this. It would be great if you'd post any results of your search on this board for the benefit of anyone else who finds themselves in a similar position.

Best wishes

Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Print the post  
UnThreaded | Threaded | Whole Thread (10) | Ignore Thread Prev Thread | Prev | Next | Next Thread

Announcements

Disclaimer:
In accordance with IRS Circular 230, you cannot use the contents of any post on The Motley Fool's message boards to avoid tax-related penalties under the Internal Revenue Code or applicable state or local tax law provisions.
Post of the Day:
TMFDeej's CAPS Blog

Activist Investors Unlocking Value at LSB Industries?
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Community Home
Speak Your Mind, Start Your Blog, Rate Your Stocks

Community Team Fools - who are those TMF's?
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and "#1 Media Company to Work For" (BusinessInsider 2011)! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.
Advertisement