Q: What tax consequences occur when 3 people on title go to one?Parents want to transfer their ownership share to daughter.
I'm their buyers' agent.Property is an 800K condo in Orange CO, CA. Parents put down 450,000+ as down payment. Daughter will live in it and make the payments.Parents live in Northern CA. Daughter qualified for the loan and loan is in her name only. Originally parents were going to gift her the down payment. Instead, someone told them they all three should go on the title equally, possibly to escape the tax associated with that large a gift amount. (my guess.) Dad is now asking what tax consequences there are for the daughter if he and his wife transfer their share to her in the future. Does it matter when? Are there tax consequences associated with her getting their share, either immediately or when she sells it? I think it doesn't matter as far as property being assessed for property taxes, but please clarify that also. I think they are mainly concerned with getting hit with a gift tax or some kind of capital gains tax, either when it's transferred or when the property is sold. Thanks
A: Parents may use the sale or gift concept and either way the daughter may be eligible for the property re-assessment exemption. The information presented herein is for general purposes only. It is not intended to, and may not be construed as legal, tax or accounting advice. Neither is it intended for solicitation purposes. For specific advice, please consult an appropriate attorney in person. Good luck. Zaher Fallahi, Estate Planning and Tax Attorney, CPA.
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