Parents want to put title of house in my name, how can I be screwed over here?

[erub]

as i understand it, yes

 

[BaliBabyDoc]

The gift tax and estate/death tax are one in the same.

Gift tax laws are generally designed to prevent complete tax avoidance by this route. The Federal Estate Tax is integrated with the Federal Gift tax so that large estates cannot be shielded from taxation by lifetime giving. Many states also impose an estate tax.

Dude, you need good legal advice not ATOT (although erub is helpful). Don't forget state gift/estate taxes which are surely to go up b/c the Feds used to give a kickback to states from the Federal tax which is being phased out . . . kinda. Almost every tax authority will work with you but your big problem is that annual property tax.

Estate&Gift Taxation Legal Advice

Gift/Estate Tax Law for Non Swindlers

 

Taxes. Taxes and more taxes.

 

[Tates]

<< <<Capital Gains kick in if the property was not a primary or secondary residence. If it is a primary or secondary residence and if the house was lived in at least 3 of the last 5 years, then any capital gain is non-taxable.>>

That is only true if the money is re-invested in a house of equal or greater value of the sales price within 18(?) months. Otherwise it is considered capital gains.

You are right about the death tax, I got that mixed up. >>



Actually we are both off a bit. The new tax law stipulates (from IRS website):



<< If you meet the ownership and use tests, you will generally only need to report the sale of your home if your gain is more than $250,000 ($500,000 if married filing a joint return). This means that during the 5-year period ending on the date of the sale, you must have:
? Owned the home for at least 2 years (the ownership test), and
? Lived in the home as your main home for at least 2 years (the use test).
If you owned and lived in the property as your main home for less than 2 years, you may still be able to claim an exclusion in some cases. The maximum amount you can exclude will be reduced. If you are required to report a gain, it is reported on Form 1040, SCHEDULE D, Capital Gains and Losses.
For additional information on selling your home, refer to Publication 523, Selling Your Home. >>



If the amount exceeds that allowed, a 1041 exchange can remedy the tax exposure.

 

[Igore]

my advice is this: walk softly and carry a big lawyer.

however if you are determined to help your folks then you should probably buy the house outright, even if its only for one dollar and then rent the house to them complete with signed lease aggreement. that way is a pain in the butt but then you will be protected. just make sure the amount of rent covers the taxes and insurance that you'll need to have. it sounds like (and from everyone else seems to think also) that you parents are trying to hide assets. personally, parents or not, i would run like the wind and not look back. but you have to make that decidsion for yourself. you should, at the very least, retain a very good lawyer. most people get burned harder by family than the do by scam artists and business associates. don't let your parents screw you over. stand up to them if you need. no offense but it sounds like your the more resposible one and they are acting like kids. imagine that, in this day and age.

just my 2.5 cents.

ig

 

[glenn1]

<< It seems to me that your parents are trying to hide assetts from creditors. >>



Including, possibly, the IRS. Not to assume the worst, but another possibility (apart from capital gains, property/gift/etc. taxes), that you may be aiding and abetting an attempt to evade income taxes, or escape garnishment and other tax collection methods the IRS had in mind. Being dragged into a criminal proceedings for tax evasion is something you probably wouldn't want to get yourself into, IMHO. Again, this is perhaps worst-case scenario, but it gives you an idea of some of the difficulties you might be undertaking if you agree to "help."

 

[kranky]

I'm not going to pick it all apart, but there has been some bad advice given in this thread.

You're very wise to make sure you fully understand the implications of this move, so please, please, consult a lawyer for professional advice. And ask him about tax implications (now and down the road).

 

[DevilsAdvocate]

Tell them to call a lawyer. Don't seek legal advice here.

 

[Igore]

<< Tell them to call a lawyer. Don't seek legal advice here >>



i second that with one exception, this is to say, also consult a lawyer of your own. one that is in no way connected to your parents or their lawyer should they happen to have one.

another few cents

ig

 

[FettsBabe]

DO NOT call an attorney. First off they hardly know anything about tax law. If you want to know all the details contact a local CPA. He can give you first hand information regarding all the taxes, capital gains, etc. Do call a CPA (not a regular accountant).

 

[Ameesh]

dont ask here, talk to a CPA or a Tax Attorney.

 

[sandmanwake]

Thanks for everyone's input so far. I did talk to a lawyer over the phone concerning this situation; some guy my parents found to try to convince me to go ahead and do so. In talking to him, I figured out that my parents weren't being up front with that lawyer and was able to fill in some more details for him. All in all, I still feel uneasy about this, especially being pressured and rushed into a decision. If they keep pushing, I'll probably just tell them no (I can already hear the whining, crying, and guilt trip about how they gave me life and the least I could do is help them out). The lawyer my parents found may be able to help out as far as answering some of my questions, but I'm not going to go by his words alone though. Maybe I should talk to a finacial advisor at school.

 

[rahvin]

Fettsbabe beat me to it. Go talk to a CPA that speciallizes in Estate planning. She/He will know everything there is to know about all the applicable rules and laws about who you will owe and what you will owe. Be very carefull, if you are aiding and abetting your parents in commiting a crime you can get in big trouble and hiding assets from a bankruptcy court/IRS is a criminal affair. There are big implications to having that title in your name, it's a huge asset and it's transfer to you will show up on someones radar.

 

[Cable God]

Do NOT do it. It just doesn't sound right. Something's fishy. Back away and talk to a CPA and lawyer of YOURS not theirs.

 

[FettsBabe]

You don't need to talk to your parents attorney. He works for them....not you. You need to contact a CPA and a Tax Attorney.

 

[Thegonagle]

Sounds fishy. I wouldn't want to be a part of that if something went wrong.

 

[Jfur]

tell them you want to go to grad school and that owning the house will make it hard for you to get financial aid/loans

 

[Thegonagle]

Excellent point, Jfur.

Wow, you're up early! J/K

 

[Nutdotnet]

Hmm I would tell them one word...NO!

 

[sandmanwake]

jfur, I tried that approach already--didn't work. I guess it doesn't matter how hard it makes it for me to go to school, just so long as their behinds are covered.

 

[Thegonagle]

If they want to get welfare, why are you ashamed? On the surface of your "long story short," it looks like they should get jobs, but I don't really know what's going on.

Tell them to sell the paid for house. Then they will have lots of money all of the sudden.

I say this is crap, and they are asking you to help them commit a crime. You really could get into a lot of trouble, but I don't know exactly how bad it can get for you.

 

[fatalbert]

be very cautious and get some advice from a CPA or tax attorney

 

[MadRat]

Consult a CPA. You can take ownership of the house and borrow from a bank against the value of the house. Use this money to pay the taxes that your CPA will show you owe. Your parents avoid a huge capital gains tax by transferring the title to you rather than you buying it from them. Your CPA can show you how to shelter the new assett out of reach of the IRS, too. You do realize that the IRS and welfare agencies can go back two years to sieze assets?

 

[sandmanwake]

Well, my dad showed up at my place unexpectedly today with papers for me to sign. I pretty much told him that I didn't want to do it because I didn't want to go to jail. Of course he made a couple last ditch effort to sway me, but I pretty much got pissed when he said he wanted me to pay the property tax on the house each year even though I wasn't going to be living there and they will be. Hopefully that is that.

 

[Mr.IncrediblyBored]

<< Of course he made a couple last ditch effort to sway me, but I pretty much got pissed when he said he wanted me to pay the property tax on the house each year even though I wasn't going to be living there and they will be. Hopefully that is that. >>


:Q Stand your ground. If your endearing fathers tries the guilt trip, tell him to piss off. Its become quite obvious your best interest isn't top priority.