Legal Question in Wills and Trusts in Florida

joint ownership and capital gains

I've read with interest some of the questions and replies related to joint ownership of a home and capital gains.

Recently, I placed my two sons on my deed as joint owners with rights of survivorship. Now having read some of the other topics on this subject, I thought I might ask how the captial gains rules will work when I pass away. Will my sons have to maintain ownership and live in the house for two years to gain the capital gains exemption or will they be able to sell it immediately if they choose and still qualify for that exemption?

Thank-you.

Liz


Asked on 8/21/03, 12:52 pm

1 Answer from Attorneys
Frank J. Pyle Probate Attorney Throughout Florida

Re: joint ownership and capital gains

Your sons will receive a "step-up" in basis (to fair market value at date of death)on your share of the home, but retain their old basis on the remainder. If they sell without owning and living in the house for two years, they will pay capital gains on the 2/3. You and they could transfer ownership of the home to your name, then transfer it back to them, retaining a life estate. They would then receive the step-up in basis on the entire home at your death = no capital gain. An enhanced life estate is also something you should ask your attorney about.

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Answered on 8/21/03, 9:09 pm


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