Mommy giving me her house?

[BK911]

Mommy just bought a house in FL a few months ago.
Daddy in law just passed.
So Mommy is moving in with me in TN.
That leaves an empty house in FL.
House is not paid off and she still owes about what they paid for it.
We could sell it, but with real estate fees, closing, plus the ~$10k in closing she just paid, she would most likely take a loss on it.
We are considering renting out the house, with or without a property manager.
I am trying to decide if it is worth it to put the house in my name, or keep it in her name.
Inheritance versus gifting, seems inheritance is better?
My google fu is confusing me.
Anybody deal with this?
Any advice?

[HardDrive]

Have your mother sell immediately, lick your wounds, move on.

[greglepore]

Not sure why inheritance would be better. Either way you for tax purposes your basis is value at time of transfer-this is a concept primarily relating to appreciated property. Most states don't transfer tax parent/child or estate transfers. Estate tax likely not an issue, other than state estate tax.
One wrinkle will be that a transfer might make the existing loan due on transfer, either way. So, unless bank allows you to assume you'll have to arrange financing.

[1990C4S]

I own a rental two blocks from my house, that's easy.

Long distance? I would never even consider it.

Sell and move on.

[matthewb0051]

No inheritance tax in Tennessee

[Seahawk]

The key to me is where in Florida, followed by house particulars, neighborhood, etc.

We all know there are normally three keys in real estate. In Florida, there is a fourth: what mayhem is close.

Don't be afraid to rent for a year or so while you get the details figured out.

Transferring ownership is not particularly difficult depending on your financial health...but you need to take a deeper dive, especially tax posture, etc. Rentals can be a great write-off in the short term if you plan on selling.

[MikeSid]

Transfer title upon her death. You will get a stepped up tax basis to a value at the date of death.
If the property appreciates between now and then, you will save capital gains tax on that increase in value when you ultimately liquidate it. Assuming appreciation of the property, your basis will be higher than if you take title now.

If there is a non-tax reason to sell, then by all means, do what you have to do. But if you are certain you are keeping the property and the only question is mom's name or your name, then by all means, keep it in mom's name.

[pwd72s]

Keep in mind that federal tax laws are about to change...into what nobody knows.

Do you want the hassles? If not, Hard Drive's suggestion may be the best.

[greglepore]

Originally Posted by MikeSid

Transfer title upon her death. You will get a stepped up tax basis to a value at the date of death.
If the property appreciates between now and then, you will save capital gains tax on that increase in value when you ultimately liquidate it. Assuming appreciation of the property, your basis will be higher than if you take title now.
.

Yes, there's that. But rates are now at an all time low, so it might well make sense to do the transfer now as the property is transferred.

[dad911]

Do you have any siblings? If so, do you ever want to speak to them again, or speak to them $$$$ through lawyers?

A friend actually bought his parents house when they were still alive, fair market value, about 20 years ago. He cared for them both through death. Just before she died last year, mom said to them all, "Andy, I want you to split the money from the house with your sisters".....

Now it's full blown nuclear war, from siblings that used to get along.

We know what's coming when my mom passes, already been to court with my ex-sister, and their is nothing we can do about it.

[Rot 911]

First you need to decide whether it is financially a good idea to keep the house. Are house prices going up in that area? Is it difficult to sell in that area?

What is your mom’s credit rating? Good or not so good? Answer a few of these questions and I can give you better advice.

[BK911]

Originally Posted by HardDrive

Have your mother sell immediately, lick your wounds, move on.

This is definitely option one.
Trying to determine if there's an option two.
I have several local rentals already.
Just recently sold two rentals in orlando, both of which were long distant rented for over 12 years.
Not fun but definitely worth it when I $old!

Mom has border line dementia.
If we choose option two, for tax purposes and general logistics, is it better to keep mommy on deed, or add me, or remove her and just have me?

[BK911]

Ocala Fl.
Nice clean 2/2 in 55+ community.
Houses sell in days with multiple offers.
Mom has ok credit but little income.

[BK911]

One basket case sister.
Dad died last year and she got his house.
I didn't contest or try, just signed it over.
Now it will be foreclosed once covid is over.
Wont make that mistake again on moms house.

[LWJ]

If you happen to rent it out, PLEASE use a property manager. I can talk hours on this subject with personal examples of how not to do it.

[dad911]

Originally Posted by BK911

...
Mom has border line dementia......

Originally Posted by BK911

One basket case sister.
.....

You need legal, not forum advice.

Been there, it sucks, truly wish you well.

[Seahawk]

Originally Posted by dad911

You need legal, not forum advice.

My goodness, yes.

The are mechanisms to ease the transition of house ownership (you go on the deed, then Quit Claim your Mom off the deed, etc.) but you really must get the legalities suit-cased first, especially with a sister that may take umbrage. I think you have a lot of work to do beyond the house.

My Wife is her mom’s legal guardian, responsible for everything. Her mom is not longer competent. Her brother was ok with it once he understood the magnitude of the job, the fact that my wife had a will redone for her mom, etc. All done legally, in court. Completely transparent.

You have a lot of work to do...I wish you the best. Get legal council.

[Rot 911]

Originally Posted by BK911

Ocala Fl.
Nice clean 2/2 in 55+ community.
Houses sell in days with multiple offers.
Mom has ok credit but little income.

The first issue that comes up, is your mom competent to make legal decisions? If not, like Seahawk pointed out, you will need to become her legal guardian. From there you can either rent out the house, sell the house or do a deed in lieu of foreclosure to just get out from under it. But that would ruin your mothers credit.

If the real estate market is that hot in the area she has her house you can always just list the house for sale on Zillow and sell it yourself. That way you avoid commission to a real estate agent.

[Por_sha911]

Long distance landlord is a nightmare (ask me how I know). Property managers can be expensive and/or crooks. In this current political/economic climate, landlords are getting raped by non-paying renter and they can't evict.
Also, medicaid looks for assets before they will pay benefits. Some states say anything gifted (or sold at an undervalued price) in the last 7 years must be paid back before they will pay benefits. In TN, you must be a resident for a minimum number of years to be eligible. If mom needs govt assistance, having the house may pose a problem. I say sell to break even and move on.

[BK911]

Thanks Kurt, and others.
Mom is fine, just a little forgetful. For now.
I may have posted too many details.
Really just looking for tax input about Mom gifting me a house now versus me inheriting it in a few years.
That info will help me decide on rent versus sell.