Q: House in a Trust- 2 beneficiaries. 1 wants to buy 2's interest. Does Prop 13 parent to child transfer tax rate apply?
If beneficary 1 buys beneficiary 2's interest in the property, it would be removed from the Trust and put in Bene 1's name. The Settler (mom) has been dead less than 3 years. Or will the new market value set the tax rate?
A: It depends on the term of the trust and the current trustee's power. if the trustee could amend the trust, he/or she might be able to do so without violating Prop 13. I recommend contacting an attorney to review the trust.
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