Legal Question in Real Estate Law in California

Re: Can my dad avoid property gains tax?

There may be a capital gain of several hundred thousand dollars built in to this property if it has been in one ownership for 34 years, and the potential gift and future capital gains taxes could be in the $100,000 area (though probably somewhat less). Further, these taxes are LEGALLY AVOIDABLE if you and your father handle the transfer of ownership from him to you wisely.

First, I stringly recommend that you both see an estate-plnaaing lawyer about a wealth-transfer plan that keeps it in the family instead of going to the IRS. For around $1,000 you could have a trust-oriented plan set up that might save you 100 times this in the long run.

Or, you might just use an old-fashioned will. This does not avoid probate, but going through probate is not as big a deal as it's made out to be; for sure, probate is better than going the "joint tenants" route as you seem to suggest, which avoids probate but leads right to the tax collector's door, big time.

Do not, I repeat do not, go about adding yourself to title! Big mistake! (Unless your own trusted lawyer with tax expertise advises it for special reasons unknown to me).

Inheritance by trust is best, and inheritance by will is a close second, but acquiring ownership by death of a joint tenant is a tax trap, from gift, property and capital gains aspects. Usually, anyway. Probably even more so with a property that has appreciated for 34 years.