Legal Question in Real Estate Law in New York
i have an apt. that i still have some mortgage with the bank. however, i would like to give this apt. to my two adults children. if i sell it at very low price to both children (they can co-own this apt.), that give my children the right to the apt. and we can avoid the gift tax? correct?
is there a limit (such as market price ) that how low I can sell the apt.?
I can even sell at 40K dollar even if the market price is 400K?
1 Answer from Attorneys
Q. Can you sell the apartment to both children? Is there a limit as how low you may sell the apartment?
A. Usually yes. However, you must review the coop or condo rules concerning transfer. Some condo and coop boards do place a limit on the sale of a unit.
Q. What happens with the mortgage?
A. The mortgage obligation continues. If your children do not pay the mortgage, you may be held responsible on a foreclosure and short sale.
Q. Can you avoid a gift tax?
A. It would depend on the equity of the apartment. However, that question is best asked to an accountant.
Mike.
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