Home Selling in Los Angeles>Question Details

Phillip Moro…, Home Seller in Los Angeles, CA

How do I transfer title to my son?

Asked by Phillip Morong, Los Angeles, CA Mon Oct 22, 2007

I have a 185000 mortgage on a house worth about 500000. I'm divorcing my wife but we both agree to hand the property over to our children. Should we quit claim the property to them, or should we sell the home to them for what we owe? I understand if i do a gift deed, we could face some taxation. Thanks for your help.

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Answers

11
If my dad wants to transfer a home to me for which I have payed the closing cost, down payment, & all mortgage payments so far---this should be an exemption to the gift tax, correct?
0 votes Thank Flag Link Fri Apr 24, 2009
Phillip, I strongly agree with all the advises that all the Real Agents have given you. Not only the Property taxes are involved, but capital gain, etc. In this kind of situations is best to consult with your TAX attorney, so you both can meet all the legal requirements needed.
0 votes Thank Flag Link Fri Nov 30, 2007
Hi Phillip,

I'm not an attorney but I've been in the title industry for over 10 years now. I've seen too many times where people have tried to give property to their children and forget to put just some vital information on the deed. Since California taxes are 1% of your assessed value (since you have bought the home) after the proposition 13 passed. Your taxes can only go up 1% a year, every year until you sell the property or do major construction, i.e. add a pool or sunroom, something like that. So if you were to deed it to your children in the wrong fashion they would be looking at a significant increase in property taxes (5,000/yr plus all of the special taxes, assessment, mello roos, etc.). I have several forms of deed, not the cheap ones you pick up at Staples or OfficeMax. The key is you have to base it on R&T 11911 which is a parent to child transfer, as well as filling out the PCOR (Preliminary Change of Ownership form) this ensures the assessor that you are transferring title to your children and not trying to save someone money on their tax bill. I hope this is helpful to you...
0 votes Thank Flag Link Wed Nov 21, 2007
Hello Phillip. If you and your wife are divorcing, my recommendation would think that you should have a written agreement about the division of your community assets. I understand that you and your wife agree about handing over the property to your children, but I I think you need to discuss this with your attorney. Having an attorney does not mean that you have to fight. It just means that the attorney can put the agreement in writing and have it signed by the court. How the gift to your children is treated as far as taxes are concerned is also a question for an attorney. Your divorce attorney may or may not know the answer to the question, but I am sure your attorney will be able to get the answer from a tax attorney. Since gifts from parents to children are not uncommon, I think the answer to your question would be very easy for a tax attorney. Your children will also want to know how the property will be assessed and whether they'll qualify for an exclusion from reassessment (Proposition 193). If it's done right, this can be beneficial for everybody.
Best of luck to you.
Ute Ferdig
Web Reference: http://www.theMLShub.com
0 votes Thank Flag Link Tue Nov 20, 2007
Ute Ferdig -…, Real Estate Pro in Newcastle, CA
MVP'08
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I would definately consult a tax attorney... every situation is different. However, in whatever decision you make, I can assist you in obtaining the loan needed for your son to purchase the house with the gifted equity. I have extensive experience in this area. If you have any further questions. Email: ChristinaMortgage@Yahoo.com
0 votes Thank Flag Link Tue Nov 20, 2007
I agree that it would be best to consult with a professional. I know that there exists a proposition that allows the transfer of property from parent to child without having the property tax increased. In other words, instead of the property tax being assessed at the current appraisal value, your child will pay the same low property tax as you are. I changed title on my property by completing a title change form; however, I would consult an attorney about all of this just to make sure it's done correctly.
0 votes Thank Flag Link Thu Nov 1, 2007
Hi Phillip, I would advise you to consult with a real estate attorney and accountant.
0 votes Thank Flag Link Tue Oct 23, 2007
This is definately a question for a tax professional. Please get with a CPA as soon as possible. The transfer could have major tax consequences for both you and your parents if the transfer is not done properly. Your CPA can determine the best way it is a win win for both parties.
0 votes Thank Flag Link Mon Oct 22, 2007
Pam Winterba…, Real Estate Pro in San Ramon, CA
MVP'08
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Philip,
Please consult a CPA immediately. Also a real estate attorney. You do not want to make a misstep in this complex question. The wrong answer wll lcould cost you.

Also, there are issues with quit claims regarding the fidelity of title that could cause your children problems when they try to sell the property.
0 votes Thank Flag Link Mon Oct 22, 2007
Keith Sorem, Real Estate Pro in Glendale, CA
MVP'08
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In addition to an attorney, you should talk to a financial adviser and/or accountant. I think you may need to look into a trust. I'm also guessing that your son is a minor, correct?
Ruth
0 votes Thank Flag Link Mon Oct 22, 2007
Ruthless, Other/Just Looking in 60558
MVP'08
Hello Phillip, I think this is advice for which you should consult your divorce attorney. Hopefully, since you are in the middle of a divorce, you have a lawyer. If you don't, I would strongly advise you retain one.
0 votes Thank Flag Link Mon Oct 22, 2007
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