Rich Carreiro <rlcarr[at]animato.arlington.ma.us> wrote:
- quote -

Sounds more like a reverse mortgage to me. Either way it's
important to get good professional help to make sure it's
done properly.

Stu

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joetaxpayer wrote:

"But if she stays in the house, and pays you no rent,
there's an issue, you are 'renting' it to her at below
market value, and the IRS can deem that as income back to
her."

Hey Joe, how'd you come up with that "deem that as income
back to her"? I've seen lots of free-rent-to-relatives
scenarios but I've never seen Uncle make it income to the
tenant....

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Cherrybounce wrote:

- quote -

First, a question - what is the motivation here? If I read
this correctly, she needs money and doesn't need the house.

If she gives you the house, there's a reporting requirement.
The 120K value is reported and taken against her lifetime
estate credit. So that in itself would not trigger a tax
due.

But if she stays in the house, and pays you no rent, there's
an issue, you are 'renting' it to her at below market value,
and the IRS can deem that as income back to her. If you also
give her money to live on, that money is limited to 12K/year
that you can gift her with no gift tax. Otherwise, there's
more paperwork.

If she leaves you the house upon her passing, you get a
stepped up basis, fair market value.

Why not just stay in the will, and give her the money she's
needing to get by? Not to be callous, but if she's afraid of
getting sick and being forced to sell the house, she can put
it in an irrevocable trust, and it will not be taken from
her, as it's out of her estate.

JOE

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"Cherrybounce" <chdavi15[at]hotmail.com> wrote:

- quote -

She is to file a gift tax return.

--
David M. Woods, EA, ChFC, CLU
Woods Financial Services
Norwood, MA 02062
www.woods-financial.com

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"Cherrybounce" <chdavi15[at]hotmail.com> writes:

- quote -

Yes, since this sounds like some combination of a gift
and an installment sale.

--
Rich Carreiro rlcarr[at]animato.arlington.ma.us

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My mom has a house worth $120K, bought for $100k. She owes
nothing on it.

She wants to donate it to me (it goes to me in her will
anyway) now, in exchange for giving her money to live on
each month and for her to be able to live in it as long as
she lives.

Are there any tax consequences we should be aware of?

Thanks.

<< ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2006) - All rights reserved. > << ================================================== ===== >