Transferring a residence to spouse

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Subject Author Date Transferring a residence to spouse NadCixelsyd 04-03-2009  Re: Transferring a residence to spouse Dick Adams 04-03-2009  Re: Transferring a residence to spouse Mark Bole 04-03-2009  Re: Transferring a residence to spouse D. Stussy 04-04-2009  Re: Transferring a residence to spouse Mark Bole 04-04-2009  Re: Transferring a residence to spouse Reggie 04-04-2009  Re: Transferring a residence to spouse D. Stussy 04-05-2009  Re: Transferring a residence to spouse Mark Bole 04-05-2009  Re: Transferring a residence to spouse D. Stussy 04-06-2009  Re: Transferring a residence to spouse Reggie 04-05-2009  Re: Transferring a residence to spouse NadCixelsyd 04-06-2009  Re: Transferring a residence to spouse Stuart A. Bronstein 04-06-2009  Re: Transferring a residence to spouse lotax 04-04-2009
Posted by NadCixelsyd on April 3, 2009, 1:23 pm Please log in for more thread options 25 years ago, I bought a house for $150k. The house is in my name alone as I was not married at the time. It's now worth about $600k. Can I "sell" the house to my wife for $400k and get a $250k step-up in basis (assuming she doesn't sell it for several years). She has never owned real esate before. Would this qualify for the first-time buyer program that reduces one's tax liability? -- << ------------------------------------------------------- >> << 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 Dick Adams on April 3, 2009, 4:12 pm Please log in for more thread options > 25 years ago, I bought a house for $150k. The house is in my name > alone as I was not married at the time. It's now worth about $600k. > Can I "sell" the house to my wife for $400k and get a $250k step-up > in basis (assuming she doesn't sell it for several years). What you are suggesting is known as a "related-party transaction". It has no economic substance other than a phantom tax benefit and would be dissalowed upon audit - which means penalties and interest. > She has never owned real esate before. Would this qualify for the > first-time buyer program that reduces one's tax liability? Not on your house. Dick -- << ------------------------------------------------------- >> << 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 Mark Bole on April 3, 2009, 9:48 pm Please log in for more thread options NadCixelsyd wrote: > 25 years ago, I bought a house for $150k. The house is in my name > alone as I was not married at the time. It's now worth about $600k. > Can I "sell" the house to my wife for $400k and get a $250k step-up in > basis (assuming she doesn't sell it for several years). > > She has never owned real esate before. Would this qualify for the > first-time buyer program that reduces one's tax liability? > Nad, you always have so many interesting tax experiences... I don't see how *you* could get a step up in basis if your wife owns the house. Why would you sell a house for $200K less than it's worth? Do you live in a community property state? If she lives with you, maybe she owns more of your house than you think. -Mark Bole "The IRS has not issued a definition for taking a position." -- << ------------------------------------------------------- >> << 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 April 4, 2009, 2:28 pm Please log in for more thread options > NadCixelsyd wrote: > > 25 years ago, I bought a house for $150k. The house is in my name > > alone as I was not married at the time. It's now worth about $600k. > > Can I "sell" the house to my wife for $400k and get a $250k step-up in > > basis (assuming she doesn't sell it for several years). > > > > She has never owned real esate before. Would this qualify for the > > first-time buyer program that reduces one's tax liability? > > > > Nad, you always have so many interesting tax experiences... > > I don't see how *you* could get a step up in basis if your wife owns the > house. > > Why would you sell a house for $200K less than it's worth? > > Do you live in a community property state? If she lives with you, maybe > she owns more of your house than you think. How? As property purchased before the formation of the community, it is separate property. -- << ------------------------------------------------------- >> << 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 Mark Bole on April 4, 2009, 9:05 pm Please log in for more thread options D. Stussy wrote: >> Do you live in a community property state? If she lives with you, maybe >> she owns more of your house than you think. > > How? As property purchased before the formation of the community, it is > separate property. IANAL, but I have read comments on more than one occasion along the lines of the following, which I found with a quick web search. "Increased equity in separate property may become community property in certain circumstances, and separate property that is commingled with community property often becomes community property. You should check your state law and get advice if there are questions. " -Mark Bole -- << ------------------------------------------------------- >> << 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 Threads Posted Maryland Principal tax, residence vs non-residence August 21, 2008, 11:17 am Sale of NYC residence June 26, 2008, 9:49 am Principal Residence June 9, 2009, 12:47 pm 401K first residence question October 11, 2007, 10:19 pm How is legal residence determined? February 18, 2008, 6:30 am If I sell my residence at a loss ... 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