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What tax implications arise from selling my mother's house after her passing?

What tax implications arise from selling my mother's house after her passing?

Q: What are the disadvantages of adding a name to a deed?

Adding a name to a deed can have several disadvantages. It may expose the property to the new owner's creditors, complicate future sales, and affect eligibility for government assistance if the original owner needs nursing care. Additionally, it may trigger gift tax implications if the property's value exceeds certain limits.

Q: Can I put my name on my mother's house?

Yes, you can put your name on your mother's house through a legal process, usually by executing a new deed. However, this can have tax and legal implications, especially regarding Medicaid eligibility if your mother requires nursing home care. It's best to consult with an estate attorney to understand the consequences.

Full question:

We put my mother's home into mine and my sister's name at the advise of her lawyer 12 years ago due to her health issues. She is now 83, serious heart issues, but still living a semi-active life. We've been told when she passes and we sell her house, we will be have to pay taxes based on the full price of the house, since her lawyer wrote up the papers with the house being sold to us for $1.00. We don't want to put it back into her name in case she has to go to a nursing home. What should we do?

Category: Wills and Estates
Subcategory: Property of Estate
Date: 04/07/2025
State: Indiana

Answer:

Unfortunately, there are limited options available now. By transferring the house to your names, you have taken a risk. If your mother requires nursing home care, she may not qualify for federal assistance until her assets are depleted. This can happen quickly, as seen with my grandmother's experience. Since the house is in your name, you will inherit it, but you may face taxes when selling it based on its full market value, not the $1.00 purchase price. Consulting with a local estate attorney who specializes in tax issues may provide additional guidance, but this is the general situation you are facing. Best wishes.

This content is for informational purposes only and is not legal advice. Legal statutes mentioned reflect the law at the time the content was written and may no longer be current. Always verify the latest version of the law before relying on it.

FAQs

How much does it cost to add a person to a house title?

The cost to add a person to a house title can vary widely. It typically includes fees for a title company or attorney to prepare the necessary documents, which can range from $100 to $500. Additionally, there may be recording fees charged by the county. It's important to consider potential tax implications as well, especially if the property is sold in the future.

What are the disadvantages of adding a name to a deed?

How do I add my name to my mother's deed?

To add your name to your mother's deed, you typically need to file a new deed with your local county recorder's office. This usually involves completing a quitclaim deed or warranty deed, which your mother must sign. It's advisable to consult with a real estate attorney to ensure the process is done correctly and to understand any tax implications.

Can I put my name on my mother's house?

Should I put my name on my mom's house?

Whether you should put your name on your mother's house depends on various factors, including her health, financial situation, and potential need for nursing care. While it can simplify inheritance, it may also affect her eligibility for government assistance and expose the property to your creditors. Consulting with a legal professional is recommended.