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Confused about selling house to family - help?


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I see so much contradictory info online. I know I need to talk to a finance guy but id like an outline understanding before I go in. Can anyone help?


MIL wants to give us her house.

It's value is (let's say) $400,000.

She owns it outright.

She already has a new house.


So the next step is:

We get an appraisal

We write up a fair market value contract to buy the house so she doesn't get hit w a huge capital gains tax bill

She can give us up to $13,000 each annually as a gift

So we should get a family mortgage with her

And make payments minus her gift allowance of $26,000 ($13,000 each).

Or from a capital gains perspective is he permitted to give us a discount on the fair market value?


Am i on the right track ?

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I think it would be well worth the money to consult a real estate attorney who has some knowledge of family gifting a house (and I'm guessing most of them would have that knowledge).


MIL deeded her house to DH and his siblings a few years ago, although she continues to live in it.  As well as I recall all that was involved was having an attorney draw up the new deed (and of course filing/recording it).

Edited by Pawz4me
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You need to pay, to have an Attorney who handles Real Estate transactions, exclusively, draw up the contract for you.    Before you do that, I suggest that you pay a C.P.A.  (or an I.R.S. Enrolled Agent) who only does Personal tax returns, and run your ideas past him/her.  There are a lot of possible tax implications.  GL

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Found online:


If you decide to transfer ownership of your property to your child, you must use a quitclaim deed. Contact an attorney to prepare the deed for you or use an online legal service that prepares documents. To complete the deed, you'll need your full name -- and that of any other owner, such as your spouse -- your child's full name, and the property address. If your child is paying you for the home, state the amount for the consideration listed on the deed. However, if the transfer is a gift, a consideration value is not necessary. Once the deed is prepared, you will sign it in the presence of a notary public. Your child -- the grantee -- would need to sign only if your property is in Kentucky. Some states, such as Georgia, require the signatures of additional witnesses.


My uncle did this with his home.  He deeded the home to his child and no money changed hands (except for the cost to prepare and complete the deed transaction).   You could make a payment plan separate with her if that needs to happen.  



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