Legal Question in Real Estate Law in California

Re: Joint real estate ownership

Or, you could just file a partition action in superior court and buy your siblings out at way below market value which would not be subject to gift tax because it would be by court order. You see those infomercials on TV about making millions in real estate. This is one trick they use, bid on properties in partition actions because the property usually sells way below what it is worth. You can usually work out a deal with the referee that will allow you to obtain financing too.

Re: Joint real estate ownership

You could have your parents quitclaim their interest to you or, alternatively, give you power of attorney for purposes of selling the property. They and you should consult with a tax advisor to determine whether there are tax ramifications.

Re: Joint real estate ownership

This depends, I suppose, on the arrangement or understanding you have with your co-owners. Real estate is, of course, transferred by deed (or by inheritance), but a first step here would be to figure out whether your parents are going to be making a gift to you, or whether you are buying them out for fair market value.

Once the deal is negotiated, have either a lawyer or a title company prepare either a quitclaim deed or a grant deed to convey the parents' interests to you. They would have to sign before a notary.

After the deed is signed and delivered to you, you can record it with the county recorder (Los Angeles County, I presume).

A transfer of this kind has implications for several taxes - property tax, gift tax and income tax (capital gains). In a generation-to-generation transfer within a family, you can usually avoid any reappraisal that will raise property taxes (but ask the assessor for the local rules first). There will be a gift tax issue unless you buy for full market value.

The capital-gains issue is twofold. If your parents sell to you for more than they paid, they will owe capital gains tax on their profit. Also, if you inherited their interest instead of acquiring it by gift or below-narket purchase, your tax basis would be stepped up to full value at the time of inheritance, resucing your potential capital gains tax when you eventually sold it.

Finally, intra-family transfers of valuable property should not be done if the purpose or effect is to make the property less vulnerable to a creditor's possible lien. Such transfers are fraudulent, easily discovered, and get both the transferor and the transferee in legal hot water. I'm not suggesting that is involved here, but others will read this posting and should be put on alert.