Legal Question in Real Estate Law in New York

Re: deeding home to child

With respect to your gift tax question, the current federal exemption is $1,000,000 (lifetime). If your home's value is over that amount, 48% tax rate would apply. Note that your daughters would inherit your tax basis in property, if it is gifted to them, which will affect significantly the calculation of their gains upon a subsequent sale.

If you sell your home for less than its fair market value, the difference would be considered a gift and may become subject to federal gift tax.

Also, if your daughters are minors, you ought to consider special trusts and also consider retaining a life estate in your property. There are too many tax, property, estate planning and personal decisions to be made to cover them in this forum.

In any event, if you plan to dispose of your home in one way or another, your will and any other estate planning documents will need to be reviewed and amended accordingly.

The above reply is in the nature of general information, is not legal advice and should not be relied upon as such.

Re: deeding home to child

It would be improper for any attorney to provide you with legal advice without having first reviewed all of the facts and circumstances of your particular matter.

However, I will try to provide you with some information.

You may deed the property to your daughters. A gift tax may be due, but it depends on your particular situation.

I would recommend that you consult with an attorney so that she/he may provide you with advice for your particular situation.

Re: deeding home to child

I concur with Bill, with the following suggestion for your protection. Be sure that the Deed contain your right to continual occupancy as long as you are alive. I also suggest some written agreement spelling out who is responsible for the costs of maintaining the house, including who pays real estate taxes, homeowners insurance, who is responsible for repairs and regular maintenance. There may be better ways to draft the Deed, depending upon value of the house, to protect your daughters from having to pay a large tax when you pass on and they sell it. I strongly suggest you contact an attorney familiar with real estate, tax law and elder law, to assist you.

Re: deeding home to child

All of the prior attorney responses to your questions are good, especially the need for you to consult an attorney, before making any decision about the best way to proceed.

However, keeping that in mind, you might consider asking your attorney about the efficacy of deeding your property to yourself and your daughter w/ rights of survivorship; OR a deeding the property to your daughter, with reservation of a "life estate," in the premises, given your circumstances.

Your circumstances, ie., financials, insurances, pension, savings, family health history, etc., and the possiblity that you may require future long term care, in the event you become unable to care for yourself, are ALL Matters to be considered, and carefully examined with your attorney, in deciding your course of action, re this property, as much or more than the tax issues, you raised.

Good luck,

Phroska L. McAlister,ESQ

Re: deeding home to child

You should consult an experienced elder law specialist before gifting your house to a child. You will be able to keep control, but still qualify for Medicaid, should you require extensive care later on.

Feel free to call me at 914-478-2981 for a free initial consultation.