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I currently live with my parents who don't have substantial income and I have been helping in paying bills, property taxes on the house. The house is owned by my parents and paid off about ten years ago. My question is this:

1. Even though the house is under my parents name, can I claim to be head of household status because I pay for majority (70-80%)of the living expenses, which include credit card bill, utilities, auto/house insurance, property taxes? I don't currently claim them to be my dependent because they do have $10k earned income annunally.

The qualifying person must be a dependent, child, or stepchild. So you don;t currently qualify. Do they both earn over $2900?

2. They are thinking about giving me the house, but we don't know what's the best way to avoid paying taxes and other fees on this transaction. The house is about their only asset (valued around $100k). How should we do this?

It's probably cheapest to just transfer the title by having a lawyer prepare a new deed. Remember to have your parents file a gift tax return.
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