i have a home in NC with my daughter and i on the deed. I gave her $ for down payment, and my son the same amount. I only had my name on there to keep her former husband from trying to take it from her, and it was originally in real bad shape, but she eventually made a sucess of it.
If i die, is my son entitled to it if he is not on the deed?
Is there a gift penalty or tax to her if i take my name off the deed?
Depends on how it’s titled, whether you have a will, and if not, what your state’s intestacy laws are. If you don’t want him to have it, your will should specify what you want done with your interest.
You can sign a quit-claim deed to give whatever interest you have to your daughter while you are alive if you want.
If your state allows “tenancy by the entirety,” and you titled the house that way, then your daughter would own the entire house when you die if you die before her.
would this create a big tax liability for her? She is in NC. Or do i just do the quit claim, and be done with the worry.
I don’t know without knowing more about the situation. My guess is the amount you’d be giving her (since there’s presumably a mortgage) would be small enough that the annual gift tax exclusion could avoid some part of it, and the rest would go against your lifetime estate tax exemption. The earlier you do this, the less the gift would be worth (due to a higher mortgage and lower appreciation), and hence, less of your exemption would be used up. If you don’t expect to leave a large estate, you may not care about using up your exemption.
You probably do need to report it as a gift to the IRS.
Edit: any tax liability would be yours as the giver, not hers.
If the state allows beneficiary deeds, you can deed it to her upon your death. This is usually a very simple process. In Arizona you merely have to record a notarized statement (language is listed in the statute) that deeds the property to her on your death. You can change that at any point by recording a new statement that either negates the transfer or names someone else.
If the person you are concerned about is an ex-spouse, they shouldn’t have any legal claim on the property. Unless she is significantly in debt to him that he could force a sale(?) Or of he holds enough emotional sway/control over her to “force” her to transfer title to him. In either of those cases, I would think a trust that holds title to the property, and gives her the lifetime right to live there, and specifically denies him access might be the way to get what you want, but it sounds very expensive.
if i gift a stock, and the recipient holds it, and it decreases, the cost basis starts on the gift day, and it may go down before she sells it, so she can take a loss. Since she may not sell the house for years, she has to know the market value the day the house is gifted, as real estate is like a stock, correct?
how much is the irs lifetime estate tax exemption?
Yes, the recipient needs to know the value of the day you die as the basis. If the house is sold shortly after the person dies, then it’s reasonable to assume the sales price is approximately the value at death. If it’s several years before it’s sold, then it would be wise to get an appraisal of what the house was worth at the time of death. The recipient can also live in the house for 2+ years and then claim the $250k/$500k exclusion of profit from the sale of primary residence.
the fedeeral lifetime tax exemption for 2023 is $12,900,000. how much is thd liffetime tax exemmption - Google Search
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