Tax remifications of transfer of home

What is the name of your state? MASSACHUSETTS

I have a client who's Mom wants to transfer her 1/2 interest in her residernce to her son, who lives with her. Rather than do a life estate deed, she wants to transfer all her interest, which is valued at about 101,000.00. She is 80 years old, what are her tax consequences.

Additionally, there is another son, not living with her or my client, who also wishes to transfer his 1/4 interest to brother/client. What would this person's tax conseqences be?

Also, what captial gains tax, etc. would the client be liable for if the transfer value is approximately $125,000.00? (client already owns 1/4 interest.)

Lastly, if the Mom and son living out of the house take back a second mortgage, forgive the loan annually in the amount of $12,000.00, can the tax
problems be avoided?

Thanks.

mcbloomlaw said:

What is the name of your state? MASSACHUSTTS

I have a client whose Mom wants to transfer her 1/2 interest in her home to her son, who lives with her. Rather than do a life estate deed, she wants to transfer all her interest, which is valued at about 101,000.00. She is 80 years old, what are her tax consequences.

Additionally, there is another son, not living with her or my client, who also wishes to transfer his 1/4 interest to brother/client. What would this person's tax conseqences be?

Lastly - what captial gains tax, etc. would by client be liable for if the transfer value is approximately $125,000.00?

Click to expand...

I'm not a tax lawyer, so stand by for a tax lawyer to answer the rest of your questions.

This is a bad idea. What if son kicks ma out? What if son gets divorced and his spouse wants part of it? What if son dies?

Also, you should consider tax liabilities for son; when he sells it, his basis will be low and he will get hit hard.

Talk to an estate planning attorney about setting up a revocable trust.

(Other people may have different opinions.)