Capital Gains and Losses
Questions and comments about tax rules for buying and selling stocks, mutual funds, real estate and other assets.
Co-owned real estate with daughter
Posted by: geotech99, March 7, 2017 02:38AM
I am in the planning stages of helping my adult daughter buy a approx. $300,000 house or condo. She can cover about half of the purchase price with her own funds (approx. $150,000). My preliminary idea is I would cover the other half and we would take title as tenants in common. She would live in the house and pay all ownership expenses including property taxes (approx. $3,000/year). She would self fund any improvements.

The tax question I am posting has to do with me hopefully getting out of the ownership a few years down the road (when she gets married, makes enough money to buy me out, etc.). I'd like to eventually sell her my half at my original cost basis. If this buyout never happens I am content to be a 50% owner indefinitely. I don't have a big concern for current tax deductions (I am retired and use the standard deduction).

If I sell her my half at my original cost basis regardless of the appreciated value at the time f sale, can anyone please outline the future tax liability for each of us.

Is there any sense in forming an LLC for this purchase? (it will be her principal residence, there is no intent to rent it).

Thanks in advance for all ideas!

Re: Co-owned real estate with daughter
Posted by: Drewremedy, March 8, 2017 01:59AM
IN a perfect world perhaps...but these family deals can be a train wreck unless the operating and exit issues are well covered in writing and enforced


If you sell your share to too much below fair market value you risk having part of the deal being treated as gift...which for most people with estates below $5 million is likely a moot point .....unless you are trying to spend down so as to qualify for Medicaid ....

I don't see value of LLC..but if you own it you are entitled to use it ...and if she takes in a live in friend and 4 other relatives you have no leverage to stop it ...be careful .....



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