Q: Selling my half of inherited home still in trust after father's death is resulting in confused paperwork.
My brother is trying to buy out my half of inherited house of my deceased father. The loan company is trying to get me to sign a gift of equity letter for the complete half amount of money but if this represents his half, he already is entitled to it. So I am waiting for an explanation,however, I wonder why they would do this and it would seem "gifting" would trigger some sort of gift tax the trust would have to pay? Technically, he and I already own half each but the title is still in the trust.
A: This is a complicated question and process. There is a way to handle a buy-out without causing any tax consequences, and preserving the tax benefits from inheriting property, but the paperwork has to be handled correctly. If your brother is getting a loan to buy you out then the loan company might be making him get the property fully in his name before they can fund his loan. It would depend on what this "gift of equity" letter is and the reason for it.
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