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Quick claim deed OR joint tenant with right of survivorship OR ???

Have young relative whose elderly surviving parent is imminently near death. Parent owns a condo. Don't know if parent's will needs to go to probate. Relative will be executor.

If property transferred through QCD and eventually sold, then net sales result plus relative's income determine tax rate level?

If joint tenant then after sale tax results the same?

In any case other than seller to buyer does parent's cost basis carry over to relative?

Time is the issue. Parent near death, as mentioned above.

My own case solved decades ago with property in trust and moot inheritance from 1st parent to pass, trust taxes having very low basis, so I have no comparable experience on which to advise.

Thanks!!

Reply to
Al Garcia
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When someone inherits property (real or otherwise) from a person who has died, the tax basis of that property generally goes up to current market value. So if it is sold shortly after that, there is unlikely to be any income tax at all.

If by QCD you mean qualified charitable distribution from an IRA, there is also no tax.

That depends on who paid what to purchase the property.

If the property is gifted before death then the owner's cost basis carries over to the new owner. If it's given on death, then the basis is current market value.

Perhaps you should talk to a local tax preparation professional (CPA or Enrolled Agent) to make sure you are getting the right story as the law applies in your specific situation.

Reply to
Stuart O. Bronstein

It's hard to tell what you're asking. In general, when someone dies, the value of the assets that go into the estate is their FMV as of the time of death. For a house, if the estate or a beneficiary sells the house soon after death the estate can generally say that the sale price was the FMV so there's no taxable gain. For this calculation it doesn't matter who the beneficiary is.

If the relative keeps the house, the basis is the FMV as of the time of death which generally means it should be appraised. If the relative later sells the house, the taxable gain or loss is relative to that basis.

If you're asking whether the parent should sell or give away the house quick before he or she dies, the answer is NO. It's much better for the house to pass through the estate and get the benefit of the step-up. The only possible exception is if the parent's estate is large enough to be subject to estate tax, but that only applies if the estate is worth over over $11 million and I'd hope in that case they'd hire some actual tax experts.

By the way, it's Quitclaim, not Quickclaim.

Reply to
John Levine

Actually even when the parent's estate is large, giving it at death is often the better alternative from a tax standpoint. Remember that gifts during life are brought back into the gross estate for estate tax purposes, with the possible exception of the $15,000 annual exemption for a total saving of about $6,000. In the mean time if difference in the value of the property since the parent bought it is more than $30,000, they still are better off with the stepped up basis.

Reply to
Stuart O. Bronstein

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