Question on purchasing a house in Joint Tenancy and tax if one dies.

Luc

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Sep 6, 1999
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My wife and I purchased a home in joint tenancy that includes my mother. So all 3 of us are title holders of the house. It's my understanding that in joint tenancy, it's rights of the survivors so that when my mom dies (that's if she goes first :bg
, all we have to do is to submit a death certificate and we're the only owners of the house. My wife is concerned that we have to pay tax for that portion. I'm confident that it's not the case but she wanted me to find out for sure.
 

Jeff Ulmer

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I think that will depend on local laws. Joint tenancy between spouses should just revert to the survivor, but having a parent involved may not follow the same rules, and could leave you open for sales taxes, though you should avoid estate taxes, but again, you'd need to check with the local tax board on this.
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Michael Reuben

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There should be no federal income tax consequences under the scenario you've described. As for California state taxes (income, sales or otherwise), you'll need to ask a local accountant. There shouldn't be any, but each state has its quirks.
Jeff, there may indeed be estate tax consequences to the mother's estate, depending on a number of factors. The question is whether any portion of the property's value is includable in the mother's estate for tax purposes. It's not something I know well, just enough to know that there's an issue.
In general, joint tenancy rules work the same no matter what the relation of the joint tenants.
BTW, this advice is worth exactly what you paid for it, and I disclaim any responsiblity for reliance or nonreliance thereon.

M.
[Edited last by Michael Reuben on September 26, 2001 at 06:03 PM]
 

Luc

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Sep 6, 1999
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227
Thanks for the responses thus far. Can anyone give me more details or know of a website that might?
 

Kim Donald

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Kim Donald Houde-Martens
When my gay partner passed away a few years back Our Co-Op Apt. was in Join Tenancy and upon his death there was no sales or transfer tax but Half of the Value of the Apt. on the date of his death was included in the total of the Estate. I believe this is the case with Parents also, unless your mother has other assets that would bring the total over the total amount permitted "estate tax free" you should be OK. If she does have other large assets you might want to look into getting a good tax professional on how to Protect those assets, by moving them into a Trust or into your name while she is still alive.
Another question you might want to ask is if she was to have to go into a nursing facility at some point into the future would the equity she holds in your home be exempt from her assets, for Husband and Wife there is an exemption for the primary home but I don't know the law on Mother and Son. Hope this helps.
kd
 

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