Estate/Gift Tax in SC?

[northMB]

What is the name of your state? South Carolina

Hello,

My father passed away recently without a will. His property has gone through probate and is now there is 5 names on the deed (50% mother, 12.5% for each of the 4 children). We are trying to transfer the property into one name but heard that it might be taxed as a gift. The property is worth roughly $200,000.

Would this transfer be taxable and if so how much?

Thanks!

[abezon]

Everyone who signs away their portion of the property would have to file a gift tax return, however, they would not pay any gift taxes unless they have already gifted away $1 million.

[tranquility]

What is your goal? Why do you want to make this transfer?

[northMB]

Originally Posted by tranquility

What is your goal? Why do you want to make this transfer?

We are trying to refinance, get an equity loan and improve the property. Each us live in different states and it has been difficult to get moving with so many people on the deed. Currently the home is somewhat run down and no one else is interested or has the time to deal with it and would rather pass it along to me.

(I also just realized that I posted this in the wrong forum. Sorry about that but thank you for your response.)

[LdiJ]

Originally Posted by northMB

We are trying to refinance, get an equity loan and improve the property. Each us live in different states and it has been difficult to get moving with so many people on the deed. Currently the home is somewhat run down and no one else is interested or has the time to deal with it and would rather pass it along to me.

(I also just realized that I posted this in the wrong forum. Sorry about that but thank you for your response.)

No, you posted in the correct forum, because your question was a tax question.

Are they going to just be giving you their shares of the property, or are they getting something else from the estate in exchange for you getting the entire property?

If its the former, then each one of them would have to file a gift tax return for the value of the property that they are giving to you, but as was explained before, there would be no tax due unless they exceeded their lifetime exclusion for gifting. If its this scenario its a shame it wasn't handled while the estate was still in probate, because they could have refused their share of the inheritance.

If its the latter, then no gift tax return would have to be filed, because they would basically be selling you their share.

[tranquility]

I still don't know your goal. I don't think you want to give the property to each other as that gift removes your rights. I don't see a single person wanting to pay you for the property so they can make improvements either. It seems like you may want to make it a rental? If so, maybe a limited partnership or LLC to own the property with each receiving a proportional share for the amount of ownership.

[northMB]

No, you posted in the correct forum, because your question was a tax question.

Originally Posted by LdiJ

Are they going to just be giving you their shares of the property

Yes

Originally Posted by LdiJ

If its the former, then each one of them would have to file a gift tax return for the value of the property that they are giving to you, but as was explained before, there would be no tax due unless they exceeded their lifetime exclusion for gifting. If its this scenario its a shame it wasn't handled while the estate was still in probate, because they could have refused their share of the inheritance.

Thanks! That answers it. They wont pay tax but anything over $12000 will be deducted from their lifetime exclusion for gifting (which none of them have exceeded).

Originally Posted by tranquility

I still don't know your goal. I don't think you want to give the property to each other as that gift removes your rights. I don't see a single person wanting to pay you for the property so they can make improvements either. It seems like you may want to make it a rental? If so, maybe a limited partnership or LLC to own the property with each receiving a proportional share for the amount of ownership.

The LLC is a good idea but they do want to give me the property and give up their rights. Currently it is a rental property but isn't breaking even because it isn't in good shape. If we were to sell, after deducting the mortgage, taxes and fees, and the money I have personally invested into the property, there would be nothing left to split between the 5 current owners. So everyone sees it as a liability and doesn't want any part of it. They would rather give it to me than invest the time and money it takes to turn it around.