Transferring House Deed to Son

[mrsnshick]

What is the name of your state? PA

Hello. I have two questions.

1) My hubby and I own 2 houses. One is a single that's rented out and other is duplex in which we live in 1/2 of the house and tenant lives in other half (also called a double block home is some areas). Out tenant moved out Oct 2007 from the 1/2 double and we have not rented it out. We want to get out of the rental business so we opened up a hole in the wall, hense a doorway, and are using the whole house as one home rather than two seperate living areas. We connected our water supply so it runs in the "other half", connected that electrical box to our box so we pay electrical for that half, our furnace has been hooked to the other side's heating pipes so we are applying heat from our furnace to the entire house and other measures to make it one house rather than two residences.

How do we go about notifying the tax office that the building is no longer a 1/2 rental but now a single house?

2)After we change the described home into a single house, we'd like to put it in our son and daughter-in-laws name and have them live in it. Our son is an only child and would inherit both houses upon our death (we have a will naming him just in case).We'll move to our single rental home thus taking ourselves out of the rental business. We are in ill health but not on our death beds (yet) but don't need the hassles of tenants and repairs etc. Our son has been doing the work on the houses for 6 years since my husnand became disabled and it's just too much. He has 2 kids and can use the double house turned into a single house for his family and not pay rent as he is now!

He might as well get his inheritance now rather than 20 years when we die (we're in our early 50's so here's wishful thinking with 20 years).

In the long run, everyone wins. I don't want our son to have to pay taxes or me to pay sales taxes. We'd sell for $1 plus love and affection (ha ha saw that somewhere)

How would l I go about transferring the house to my son and wife the cheapest way for us all?

Thanks for any insight.

 

[FarmerJ]

Im sure your local zoning dept /building inspections desk would be more than happy to decertify the 2 family home for you , you also should take apart one of the kitchens to make it obvious that its one home , do not forget to have the second electric meter removed and capped , same with second gas meter if there are 2. AS far as the rest of your wishes your going to have to talk to a atty with experiance in elderlaw/estate planing. BTW if you choose to not recertify the structure and leave everything else alone it might just help increase the marketability of the structure compared to being a SFH, wich could be useful if by chance your son were to become single again.

 

[anteater]

If you gift it to him and his wife, you may be making a reportable gift for tax purposes. Every person can gift $12,000 per year to as many persons as they wish and not incur a gift tax reporting obligation. In the case of real estate, that means the fair market value of the house. Dummying up a sale for $1 does not make it a purchase. Even if the gift is reportable, that does not necessarily mean that gift tax is due. Each person has a $1 million lifetime reportable gift exclusion before gift tax must be paid. Using that exclusion does eat into the federal estate tax exclusion, but, if you do not expect your estate to be above the estate tax exclusion, that may not be a factor.

Other things to consider:
1) With a gift, the person(s) receiving the gift take on your cost basis, which may be low, as opposed to receiving a stepped up cost basis if the property is inherited. That would be a factor in looking at capital gains taxes if the son & wife should sell. However, if the son & wife intend to live there for at least two years, they would qualify for a primary residence capital gains tax exclusion of $500,000.

2) Do you have enough other assets to cover long term care for at least 5 years. if needed? A gift could disqualify you from receiving Medicaid if made within 5 years of applying.

3) While your estate amy be small enough to escape federal and state estate taxes, PA does have an inheritance tax. 4.5% for lineal descendants; 15% for other descendants.

These are factors to consider in making your decision. You should talk over the options with a tax professional and/or estate planner.

 

[foreclosureguru]

What is the name of your state? PA

Hello. I have two questions.

1) My hubby and I own 2 houses. One is a single that's rented out and other is duplex in which we live in 1/2 of the house and tenant lives in other half (also called a double block home is some areas). Out tenant moved out Oct 2007 from the 1/2 double and we have not rented it out. We want to get out of the rental business so we opened up a hole in the wall, hense a doorway,

code violation

and are using the whole house as one home rather than two seperate living areas.

code violation

We connected our water supply so it runs in the "other half",

code violation

connected that electrical box to our box so we pay electrical for that half,

code violation

our furnace has been hooked to the other side's heating pipes so we are applying heat from our furnace to the entire house

code violations

and other measures to make it one house rather than two residences.

AND NONE OF THIS BY PERMITS?

How do we go about notifying the tax office that the building is no longer a 1/2 rental but now a single house?

BEFORE OR AFTER THEY COME AND MAKE YOU MOVE OUT BECAUSE SOME OF THIS IS NOW SAFETY ISSUES? You have to get this zoned SFR 1st...Do NOT plan on ever getting a new mortgage until you now complete this project and further violating your codes in doing this without permits. Further, if the lender became aware of this they can call the mortgage, I cannot for the life of me figure out why people think they can simply alter things on their own without permits. I would STOP doing anymore damage until you at least get permits and this placed rezoned. An appraiser would have a field day over there and a lender a stroke...lucky for you they are far too busy foreclosing and opening new depts. to fix their own errors in making these loans to people such as yourself

2)After we change the described home into a single house,

IF YOU CAN get approved by zoning to do so, and then by permits

we'd like to put it in our son and daughter-in-laws name and have them live in it. Our son is an only child and would inherit both houses upon our death (we have a will naming him just in case).We'll move to our single rental home thus taking ourselves out of the rental business. We are in ill health but not on our death beds (yet) but don't need the hassles of tenants and repairs etc.

wait until the zoning board sees what you have done to the place, you have no idea what you hae done

Our son has been doing the work on the houses for 6 years since my husnand became disabled and it's just too much. He has 2 kids and can use the double house turned into a single house for his family and not pay rent as he is now!

unless they condemn it until all is done correctly and by code

He might as well get his inheritance now rather than 20 years when we die (we're in our early 50's so here's wishful thinking with 20 years).

In the long run, everyone wins. I don't want our son to have to pay taxes or me to pay sales taxes. We'd sell for $1 plus love and affection (ha ha saw that somewhere)

ha ha you now are about to get re-assessed going from a duplex to a sfr and IT'S sq.' footage

How would l I go about transferring the house to my son and wife the cheapest way for us all?

a relative refi. but you cannot, no way no how until you basically re-build this duplex/sfr issue

Thanks for any insight.