My father left 2 real properties in his will to me. I would like to transfer one of these properties to someone else but I need to know the least costly way to do this? I need to ensure both I and the recipient are able to bear the costs, whatever method is best. At this time we have no idea of possible costs. The recipient is not a relation.
The answers have helped me realize that I need to give more to clarify and can remove unneeded information
I have a condo worth $50 - 60,000. Titled to me and no mortgage. I want to give it to a non-family member. Not when I die but now. I am concerned that I would pay about 40% of appraised value in taxes after gifting the property.
I need the least expensive way for me and for him to give him the property.
I have spoken to 2 real estate attorneys and both said they didn't have an answer. However, I also spoke to a tax attorney and he wasn't sure the best way so I don't know what type of attorney I should speak to.
Everyone has a lifetime gift tax exemption. That amount is currently $5.34 million. Do an internet search for "lifetime gift tax exemption." If you are like 99.5% of the population, you have never made large gifts. If that applies to you, you will need to file a gift tax return but will not owe any tax. You should get an appraisal from an experienced licensed appraiser as soon as possible for the fair market value at the date of death. Your donee will receive a carryover tax basis on the property so the appraisal value will be his or her tax basis. You could also transfer the property over several years by transferring a percentage of the property that is valued at $14,000.00 at the time of gift. That would allow you to avoid filing a gift tax return. However, in order to do that, you would need to obtain a new appraisal each time a gift is made so you are transferring the correct percentage.
David Luther WoodwardChapter 11 Bankruptcy AttorneyPensacola, FL ·
Are you selling or giving?
If you are selling, there will be documentary stamp tax based upon the REAL consideration or sale price for the property. As I recall, it is $0.60 per $100 dollars of consideration. There will be a recording fee of $10.00 for the first page and an additional but lesser amount for any additional pages; however, you should be able to get a deed on an 8 1/2 by 14 page unless the legal description is particularly long. Although you can sell anything for any price you will take, be aware that the property appraiser, tax collector and the clerk will look with jaundiced eye if the sales price is significantly lower than the assessed value.
If you are giving, then the consideration is "Love and Affection". Then doc stamps on that are minimum: $0.60, but the page cost for filing is the same.
Either conveyance should be by SPECIAL WARRANTY DEED.
A property lawyer can help you out on this; however, if you are also including title insurance, the title company can prepare the deed "as an incidence of issuing a policy of title insurance".
you have to probate the Will first before you can transfer anything. After it is probated you can do a distributive deed from the probate estate and then you can deed to whoever you want. The probate costs will be at least 3% of the value of the properties if they are not your father's homestead. The court costs for probate will be about 600-700. The deeds are in addition and there will be doc stamps depending on how much is owed on the properties and how much the third party is paying for the property. You need to see an attorney.
The other two attorneys make good points, but there is some gift tax issues involved as well. If you take title to the properties and then transfer over to someone else, this may be a gift tax issue depending on the amount of the transfer. For most people this is not an issue, but depending on the amount of your potential estate as well as the amount of the transfer, this gift may have tax implications. If you are a potential high net worth person, I would recommend you consult with a local attorney before transferring the property as a gift.
The other answer gave you the actual cost breakdown for documents to be recorded and minimal documentary stamp taxes (which are .70 here in my county) but you really should include nominal consideration of $10.00 in the deed. My title underwriter will not insure a transaction with Love and Affection as the consideration.
Also, the first thing that I thought of when reading your question was whether or not you have proper title to the land yourself. If your father's Will has not been admitted to probate, you may need to do that before you can convey title to a third person.
The gift tax issue is not really an issue if you have not yet used your lifetime gift tax exclusion. Unless you've given away lots and lots of money, you probably haven't.
I never recommend doing your own deeds. I do recommend you first consult with a real property attorney who also practices in probate law, and then a CPA to determine the filing requirements and tax liability, if any, related to the gift.
The answers posted by the other lawyers are all correct. However, all of those answers assume that the property is not encumbered by any mortgage. If there is a mortgage on the property you are transferring, you must pay documentary stamps on the outstanding principal balance of the mortgage rather than the minimum doc stamps mentioned by some of the other lawyers. If you are unsure of how to proceed, you should consult an experienced real estate lawyer in your area.
