Q: I have a question on CA prop 13 transfer between parent and child.

A: Whether it's a sale or gift of property to you by a parent, you should still qualify for the parent to child reassessment exemption under Proposition 58 which extends Prop 13 protection to the child, regardless of whether that child is a minor or an adult. If the property being transferred is the primary residence of the grantor, there is no limitation on the amount of assessed value (as determined by the county assessor) that can pass to the child. If the property being transferred is a property other than the primary residence of the grantor, there is a $1 million limitation on the amount of assessed value (again, property tax value, not true value) that can be transferred. It doesn't matter how the donee chooses to use the property (as primary residence, second home, or rental property). Sorry to hear about your mom.

A: A 'change of ownership' triggers a property tax reassessment.

"... a change in ownership shall not include the following...

(1)(A)The purchase or transfer of real property which is the principal residence of an eligible transferor in the case of a purchase or transfer between parents and their children.

Cal. Rev. & Tax. Code §63.1(a)(1)(A)

'Transfer' includes transfer by a will, testamentary trust, or intestacy. Passing property through a trust is preferable to probate, because probate is expensive and time consuming.

With regard to Federal Capital Gains tax, if you purchase the house, any appreciation that occurs between the date of the purchase, and the date of your Mother's death would be subject to Capital Gains and possibly NII.

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