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Posted by SMS on November 20, 2006, 10:47 pm
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Drew Edmundson wrote:
>> I have a relative that wants to add my wife to the deed of
>> her house, so that when she dies my wife will get her house.
>>
>> From what I have read, this is a bad way to transfer real
>> property.
> snip
>> What isn't clear is if the addition of a party (not a spouse
>> or child) to the deed be considered a gift of half the value
>> of the property, and if it would trigger a gift tax. It is
>> essentially a gift of half the equity in the property.
> From your message I assume the relative will remain in the
> home until she dies.
Actually, this may not be the case. She may decide to rent
out the house and move into another property, that she owns
jointly with my wife and one other sister. In that case it
becomes more complicated, since then there is income to be
split and declared, and depreciation on the rental to be
split and claimed. Or not, as we've been losing out on
claiming losses on another rental, due to income
restrictions on maximum loss.
In any case, at least now I have independent corroboration
on the benefit of doing a trust, or just putting it in the
will. I think that she thought that a good way to avoid
probate would be to add a person to the title, but she
didn't understand the implications in terms of property
taxes.
Thanks for all the advice.
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