fusili3
New Member
- Jurisdiction
- Delaware
MY jurisdiction is LA, CALIFORNIA, NOT DELAWARE!!!!!!!!!!!
I live in California. My mom bought a house in 1972 for $20,000. In 1992 she added me as joint owner and the assessment rate, which is quite low because Prop 13 protects us, did not change. The house was worth about $300,000 in 1992.
If 1 of us dies, the house automatically passes to the other, but now that the house is worth $950,000 (WITH NO improvements over the years), I am concerned/unhappy that the survivor will get only a 1/2 stepped-up value. In my crude calculation, the survivor will get 1/2 of $950,000, which is $475,000 + 1/2 of the original purchase price, which is $10,000, + a $250,000 exclusion, as both of us have lived in the house since 1972.
THE Federal capital gains tax would kick in if the house were sold at market value of, say, $950,000----the tax basis would be 475,000 + 10,000 + 250,000 = 735,000; therefore, tax would be owed on $215,000 because the sale price of 950,000 - tax basis of 735,000 = $215,000. Perhaps California also has a capital gains tax.
1. COULD I quitclaim my share of the house to my mom WITHOUT incurring a re-assessment?
2. COULD my mom then create a trust with me as beneficiary that would enable me to get a full stepped-up value if she predeceases me?
3. If those 2 steps above are not possible, does another option exist to get the full stepped-up value?
THANKS
I live in California. My mom bought a house in 1972 for $20,000. In 1992 she added me as joint owner and the assessment rate, which is quite low because Prop 13 protects us, did not change. The house was worth about $300,000 in 1992.
If 1 of us dies, the house automatically passes to the other, but now that the house is worth $950,000 (WITH NO improvements over the years), I am concerned/unhappy that the survivor will get only a 1/2 stepped-up value. In my crude calculation, the survivor will get 1/2 of $950,000, which is $475,000 + 1/2 of the original purchase price, which is $10,000, + a $250,000 exclusion, as both of us have lived in the house since 1972.
THE Federal capital gains tax would kick in if the house were sold at market value of, say, $950,000----the tax basis would be 475,000 + 10,000 + 250,000 = 735,000; therefore, tax would be owed on $215,000 because the sale price of 950,000 - tax basis of 735,000 = $215,000. Perhaps California also has a capital gains tax.
1. COULD I quitclaim my share of the house to my mom WITHOUT incurring a re-assessment?
2. COULD my mom then create a trust with me as beneficiary that would enable me to get a full stepped-up value if she predeceases me?
3. If those 2 steps above are not possible, does another option exist to get the full stepped-up value?
THANKS