I'm doing a bit of research for my folks who live and own property in California.
One of the houses in my parents name is a house they put their names on in the 80s for my mom's brother. They were new immigrants to the country and couldn't get the loan, so my mom got one in her name. They are about to pay off the loan on the house entirely. While I think it would be best to probably engage with an estate attorney(?), just trying to do some background work to understand the issue more and would like to see if any of the folks here could offer insight.
What would be the best tax efficient way to do this transfer? Quick Claim Deed?
My mom would like to avoid gifting the property because her brother's family doesn't want to pay the taxes on the transfer (the reasonableness of this is a separate question) and because she did it as a favor, my mom doesn't want to take on that burden either. My parents have a few properties and also will be attempting to transfer those to my sister/my name in a will/estate planning. Another concern is that gifting this property will impact the amount of lifetime gifting available.
You'll also want to consider how any transfer might impact the current Prop 13 benefits with regard to property taxes on the property. Normally a transfer of property will cause a loss of the Prop 13 benefit and taxes will readjust. You'd need to find out about any exceptions to see if the brother can maintains the benefit after the transfer.
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