Tax Liability

[carroll54]

What is the name of your state? California My parents own a home that my brother currently lives in. Neither my brother nor my parents can afford to make the mortgage payment at this time and have asked me to help out. My parents would like to transfer ownership of the property to me (there is about $25,000 in equity) so that my brother can continue to live there. My first question is whether my parents can actually transfer ownership, and then what the tax liability would be if I sold the home in the future. Would I be better off just helping them out with the mortgage payments for now and then getting reinbursed if and when they sell the house down the road?

[JETX]

Originally Posted by carroll54

My first question is whether my parents can actually transfer ownership

If there is a mortgage on the property as you imply, the lender agreement prohibits them to transfer ownership (since they don't 'own' the property).

and then what the tax liability would be if I sold the home in the future.

Moot....

Would I be better off just helping them out with the mortgage payments for now and then getting reinbursed if and when they sell the house down the road?

Have your parents sign a promissory note for the 'loan'.... and remember, never loan more to family or friends than you are willing to give away.

[tecate]

OP, look at the details of the loan agreement to find out what happens if your parents transfer the property.