Message Font: Serif | Sans-Serif
 
UnThreaded | Threaded | Whole Thread (9) | Ignore Thread Prev | Next
Author: Bob78164 Big red star, 1000 posts Old School Fool CAPS All Star Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 121105  
Subject: Re: Home as gift Date: 2/13/2002 8:51 PM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 2
MrMEJackson writes:

My mother has asked me to make arrangements to have all of her property, (home and several acres of farm land) transferred to me. My attorney says it would be wise for her to convey the property to me. She would be living there for the rest of her life of course. I suppose my question is... Are there some tax consequences for me in such a conveyance of property?

I reply

Congratulations on looking before you leapt! You'd be amazed at how many similar questions we get in the context of "Last year my mother transferred to me . . . ."

I see at least three concerns here. First, as has already been pointed out, if you receive the property via gift, rather than inheritance, you will get only your mother's basis in the property. Thus, when you eventually sell it, you will pay more in capital gains taxes. Moreover, because you will also receive your mother's holding period, you will not be eligible for the ultra-long term 18% capital gains rate.

Second, your mother might be triggering gift tax issues for herself. Even if you are married, and assuming that your mother no longer is, she can give you and your spouse only $22,000 before starting to use up her lifetime unified gift-estate tax exclusion. Depending on the size of her estate, this may or may not be a problem, but at a minimum your mother should be aware of the possibility.

Third, at least on this Board, the most common reason for the parent of an adult child to transfer "all of her property" is to establish Medicaid eligibility without spending down the estate. This is a very thorny legal area and it is all too easy to commit a crime while trying to advance this otherwise laudable goal. If that's what's going on, I urge you to consult an attorney who specializes in elder law. --Bob
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Print the post  
UnThreaded | Threaded | Whole Thread (9) | Ignore Thread Prev | Next

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