Put property in their name?

[JG EA]

I'm thinking that the issues involved in property owned by mother and lived in by children would be

Legal issues to protect the children for which they need to see atty.
Tax isssues: FMV vs. inheritance, mother filing a gift tax return if a straight quit claim, possibility of a life estate with a gift tax return also?, if nothing done and sale takes place no exclusion.

Can you think of more? I think there may be something big I'm missing.

I appreciate all brain storming.

[John of PA]

If the children sell.............

If you put the property in the children's name, when the children sell the property, they will probably get clobbed with capital gains tax (kids basis is parents basis), which would far exceed inheritance taxes that would be paid on the property at death.

[ChEAr$]

inheritance

If you put the property in the children's name, when the children sell the property, they will probably get clobbed with capital gains tax (kids basis is parents basis), which would far exceed inheritance taxes that would be paid on the property at death.

Or..... taxes that would not have to be paid, since most houses in US sell for less than
estate exemption. (Your mileage may vary! lol)

[John of PA]

State Inheritance Taxes

But many states, such as PA, does not have an exemptlion like the Federal, so everyone pays state Inheritance tax, regardless of the size of the Estate. But in PA the rate is only 4 1/2% for children, 12% for others (zero for husband or wife).

[JG EA]

Thanks for all your replies.