Q. I want to sell my house to my child for $1, how to do it cheaply?
A. You can do it without involving a lawyer - just create a quit claim deed to your child and you are done.
However, if you think you are doing your child a favor by selling your house for $1 to him or her, you are wrong!
The reason is simple, for child who receives the house for $1, that sets the cost basis of the property. Later on, when he or she sells the house, it could easily result in massive capital gain tax.
You can easily avoid such unnecessary tax for your child by willing it to your child - when you die, your child will receive it with then market value as the property's cost. The property will be counted as your estate, but if your estate value is less than $5 million, there is no tax implication.
A. You can do it without involving a lawyer - just create a quit claim deed to your child and you are done.
However, if you think you are doing your child a favor by selling your house for $1 to him or her, you are wrong!
The reason is simple, for child who receives the house for $1, that sets the cost basis of the property. Later on, when he or she sells the house, it could easily result in massive capital gain tax.
You can easily avoid such unnecessary tax for your child by willing it to your child - when you die, your child will receive it with then market value as the property's cost. The property will be counted as your estate, but if your estate value is less than $5 million, there is no tax implication.
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