Home Page link  

CA property tax effect of adding names to title then quitclaiming

  
Groups | Search | About
User Password
Register Now! Lost Password?

Taxes General Forum - Tax professionals meeting place and answers to queries. (Moderated)

 Post an article  get this group's latest topics as an RSS feed add this group's latest topics to your My MSN content add this group's latest topics to your My Yahoo content  add this group's latest topics to your Google content  YahooMyWeb Yahoo!  Google Google  Windows Live Favorites Windows Live  del.icio.us del.icio.us  digg digg  Add to Netscape Netscape
Subject Author Date
CA property tax effect of adding names to title then quitclaiming maliburon64 03-23-2008
Posted by Avrum Lapin on March 23, 2008, 10:44 pm
Please log in for more thread options
>
> >
> > > http://www.leginfo.ca.gov/.const/.article_13A
> > >
> > > (h) (1) For purposes of subdivision (a), the terms "purchased" and
> > > "change in ownership" do not include the purchase or transfer of the
> > > principal residence of the transferor in the case of a purchase or
> > > transfer between parents and their children, as defined by the
>
> I believe that is the language that prop 58 added in 2004.
>
> > I have very little understanding of the opportunities or limitations
> > that might be posed by this section -- preserve Prop 13 benefits?
> > reduce estate tax? -- but let me start with a definition question,
> > namely:
> >
> > Interpretation of "parents and their children"?
>
> "...as defined by the Legislature..."
>
> What is meant by ³child² under Proposition 58?
> € Any child born of the parent; or
> € Any stepchild or stepchild¹s spouse while the
> relationship of stepparent and stepchild exists; or
> € Any son/daughter-in-law of the parent; or
> € Any child statutorily adopted before the age of 18.
>
> Also the "first $1,000,000 in value" refers to the prop 13 value (also
> called the factored base year value), which has nothing to do with the
> current market value. For example the base year value on my home is
> under $200,000 but the market value is about $1.5 million.
>
> An interpretation by San Mateo County can be found at:
>
> http://www.co.sanmateo.ca.us/vgn/images/portal/cit_609/87377865prop_58_19
> 3.pdf
>
When you sell or transfer property in California there are questions on
the application to record title which address retention of Prop 13
values. Who ever files (you, your attorney or the title company) needs
to check the appropriate boxes

--
<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2007) - All rights reserved. >>
<< ------------------------------------------------------- >>

Posted by AES on March 23, 2008, 11:28 am
Please log in for more thread options
 In article
maliburon64@gmail.com wrote:

> If a daughter adds parents names to her home will property taxes be
> increased.
>
> If at a later date the daughter quitclaims her interest to parents
> will property taxes be effected.

Sounds like an attempt to transfer ownership without triggering loss of
Prop 13 benefits . . . ?????

(Although the transfer is in the opposite direction to what one might
expect to be the more common case of interest, that is, parents to
children.)

I'll watch with interest the responses to this query. Does this "add
names, then quitclaim" technique also provide a way to play estate tax
reduction games?

--
<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2007) - All rights reserved. >>
<< ------------------------------------------------------- >>

Posted by Ernie Klein on March 23, 2008, 11:44 am
Please log in for more thread options
In article
maliburon64@gmail.com wrote:

> If a daughter adds parents names to her home will property taxes be
> increased.
>
> If at a later date the daughter quitclaims her interest to parents
> will property taxes be effected.

I would not attempt that without consulting a CA Real Estate tax lawyer
first.

(Probably transferring a property from daughter to parent will result in
a federal gift tax requardless of how it is done, but that is not the
question you asked.)

California has several voter approved propositions governing property
transfers and taxes. Prop 13 is the best known, but there are several
others as well (prop 60 and 90 which probably don't apply here) and
props 58 and 193 which deal with transfers between parents and children
and grandparents and grand children respectively.

Prop 58 probably fits your situation and may allow a transfer without
triggering an reassessment or tax increase if all parties (and the
property) are qualified under prop 58 and the transfer is done properly.

Like I said, I would not try to do this without legal help.

--
-Ernie-

--
<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2007) - All rights reserved. >>
<< ------------------------------------------------------- >>

Posted by D. Stussy on March 23, 2008, 6:14 pm
Please log in for more thread options
> If a daughter adds parents names to her home will property taxes be
> increased.
>
> If at a later date the daughter quitclaims her interest to parents
> will property taxes be effected.

Prop 58 issue: Generally no. (See the other replies; they were more in
depth)

GIFT TAX ISSUE: Yes - and possibly an estate tax issue when they die and as
the beneficiary, you get it back.

--
<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2007) - All rights reserved. >>
<< ------------------------------------------------------- >>

Posted by Stuart Bronstein on March 24, 2008, 5:41 pm
Please log in for more thread options
maliburon64@gmail.com wrote:

> If a daughter adds parents names to her home will property taxes be
> increased.

Depends on the value of her home and if she's living in it at the time.
Assuming it qualifies, CA property tax will not be increased AS LONG AS
a request for exemption is filed within three years of the date of the
transaction. If it's not filed the exemption is lost.

> If at a later date the daughter quitclaims her interest to parents
> will property taxes be effected.

Same as above.

Stu

--
<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2007) - All rights reserved. >>
<< ------------------------------------------------------- >>

Similar ThreadsPosted
Re: CA property tax effect of adding names to title then quitclaiming March 24, 2008, 9:28 pm
title insurance validity period April 10, 2008, 8:39 pm
Adding beneficiaries w/o social security #'s January 26, 2007, 4:42 am
Adding Option cost to stock basis February 10, 2008, 2:41 pm
Adding a party to a real estate deed, what are the tax implications? November 17, 2006, 1:19 am
Effect of Married Checkbox on W-4? January 24, 2007, 2:15 am
difference between adding short dividends to cost basis or investment interest January 22, 2008, 5:41 pm
Side effect of IRS extension of filing deadline April 18, 2007, 2:16 am
Foreign Tax Withheld - Bottom Line Effect August 19, 2007, 10:18 pm
Re: Foreign Tax Withheld - Bottom Line Effect August 26, 2007, 3:00 am

Contact Us | Privacy Policy
This site is not affiliated with Intuit - makers of Quickbooks and Quicken software
This site is not affiliated with Sage Software - makers of Peachtree accounting software
XML SitemapXML Sitemap