C
cweber
Guest
My parents have a living trust which is funded with various assets, including three real properties. As part of their estate planning procedures, they have each made a gift of $10,000 ($20,000 for both of them) to each of their 3 children. The gift is a percentage interest of the fair market value of the real property at time of the annual gift. Now, this is my question:
The three properties are classified as income real estate. Each of the three adult children live in one of the three properties and pay rent to their parents. Over the past 10 years, my parents have recorded quit claims to transfer $20,000 in value to each of the three children for the year. Are there legal issues for a parent to gift an interest in real property that is occupied by the beneficiary (son or daughter) and for which a rent is paid back to the parent?
Also, how important is it to have a formal appraisal each year to determine the percent rate to calculate the $10,000 annual gift?
Thank you in advance for your advice.
The three properties are classified as income real estate. Each of the three adult children live in one of the three properties and pay rent to their parents. Over the past 10 years, my parents have recorded quit claims to transfer $20,000 in value to each of the three children for the year. Are there legal issues for a parent to gift an interest in real property that is occupied by the beneficiary (son or daughter) and for which a rent is paid back to the parent?
Also, how important is it to have a formal appraisal each year to determine the percent rate to calculate the $10,000 annual gift?
Thank you in advance for your advice.