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Reaia Switzer, Other/Just Looking in hot mail

mom bougt new house, i live in old one. should i quit claim or buy?

Asked by Reaia Switzer, hot mail Sun Sep 23, 2007

my mom got married and bought a new house with her husband. My sister and i currently live in the
old house. we pay rent to my mother and there are some repairs that need to be done. so i was thinking may be i should just have my mom quick claim the house to me or shold i just but iy from her? help pls

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6
You need to really talk to an accountant, and look at the tax implications.
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1 vote Thank Flag Link Sun Sep 23, 2007
See a professional, reputable tax or estate planning attorney. Many people in banking and real estate are new to the industry and they may not know all the consequences. Get 3 opinions minimum and if you get three different answers, then you need to keep looking for answers. Before getting ahead of yourself, make sure to discuss with your mom and siblings first.
0 votes Thank Flag Link Fri Sep 28, 2007
Anxious, aren't you?

Right now, your Mom has a regular income from this property she owns. If she quit claims, she has no income from nor investment in the property. You get a serious bonus (a free house) without waiting to see if you will inherit it.

My first question is this: is the rent you pay the going rate for a property like this?

The rest of my questions can be answered by your Mom and a tax consultant/CPA. What does she, the owner, want to do besides having you as a tenant? What are the tax implications for her of any transfer of title? What is in her best interests? What is the fair market value of the house?

Why do you mention repairs? As the landlady, ask her to make them.

Talk to your Mom first.
0 votes Thank Flag Link Mon Sep 24, 2007
Hello Reaia. I think the question is if your mother is willing to just transfer title to you. Have you talked to your mom about this? Although you state that you and your sister live in the old house now, your question is whether you should ask your mom to quit claim to you. Does that mean your sister would not be involved in this transfer? If your mom were to put title in your name alone, would she consider that an advance on inheritance? As you can see, there are some additional things that you may want to think about. The transfer of ownership could also be considered a gift which could trigger gift tax issues for your mom. I think if your mom were inclined to transfer ownership to you or you and your sister, she should consult a tax professional and maybe even a estate planning attorney first to make sure there are no undesirable adverse consequences. It's better to be safe than sorry.
Good luck.
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0 votes Thank Flag Link Sun Sep 23, 2007
Ute Ferdig -…, Real Estate Pro in New Castle, DE
MVP'08
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I would refer this to your accountant and/or attorney. Best of luck
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0 votes Thank Flag Link Sun Sep 23, 2007
Reaia,
I would normally not answer such a specific question about a locale I am unfamiliar with--I just wanted you to know that we don't have a lot of real estate pros regularly participating on "Trulia Voices" from WI right now ("Voices" is really new--help us spread the word!). If the market prices are stable where you are, I venture to say it is probably better to buy than to rent. How you transfer the title from your mom to you and your sister can have major tax implications--even a local REALTOR may not be able to provide you with the best advice--you should consult a CPA. The bigger problem with your question is how to hold the newly transferred title with your sister? What if one of you needs to move, gets married, passes away (god forbid), etc? They legal ramifications of sharing title with a person other than a legal spouse are absolutely daunting! I would recommend that only one of you purchase the home; and then reach an amicable financial arrangement for the "tenant." I hope that helps! Best wishes!
0 votes Thank Flag Link Sun Sep 23, 2007
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