Q: Should my father sign over all of his property to us children to keep us from paying inheritance taxes upon his death?
A:
Inheritance tax is now $5,250,000. If the property is greater than that amount then your dad might want to consider gifting part of the estate away during his life. Otherwise, it may not be smart to give lifetime gifts.
The above is not legal advice. It is an illustration of options that can be used in certain situations. I have not examined all of your facts, if I did I might provide a different response.
A: Depending on the size of your father's wealth, it may be tax-advantageous to inherit such property rather than getting get it as a gift. The gift would carry father's basis, which may be very little, and when you sell it, you may end up paying huge capital gains taxes. If you inherit the property, and sell it right away, you won't have to pay any capital gains taxes, because the basis is stepped up to the fair market value of the property at father's death. Consult a tax attorney with more facts for a firm advice. His estate (not you) doesn't have to pay taxes up to $5,250,000 estate this year. Most people in your shoes who meet with me, they change their minds about the gift after learning of the tax consequences. Good luck.
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