Q: Hello. My husband and I have a 5 acre property zoned RR-5 on county land. We'd like to gift 1/2 the property to our son.
We would like to gift 2.5 acres (undeveloped) of our 5 acre lot (which has our home and a large shop on it) to our son and his wife. Right now we are zoned RR-5; we know we will have to go to the county (it is on county land) to try to rezone. We wonder how gifting 1/2 the property might impact our mortgage loan (we owe about 30% of the value of the home and property and currently have a very good interest rate). We also wonder about the tax implications for him and his wife. Are there other options that are better than gifting? Thank you!
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A: Most mortgages/deeds of trust have a due on sale clause, so you cannot deed it to anyone without the lender's consent. His tax basis is the same as yours if you deed it now while your living, but he gets a stepped up basis at your death as an heir. Hire a CO attorney to advise.
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