Should my mom put my sister's name on the deed to her home?
My mom has eight more years left to pay on her house and she wants to leave it to my sister. Can she put my sister's name on the house now, so that when my mom passes, my sister can take over?
Your mother could do that. But it may not be a great idea for a number of reasons.
First, if she puts your sister's name on the deed now, she'll actually be making a taxable gift of one-half the value of the house to her. She'll have to file a gift-tax return by April 15 of the year following the transfer. She won't have to pay any tax on the transfer if that half is worth less than a million dollars, but she still needs to report any gift of more than $12,000 to any one person in any one year.
Second, if your mother puts your sister's name on the house now, and your sister gets into any creditor problems, your mother's house is at risk.
Third, when your mother dies, your sister's half of the house will have your mother's original tax basis -- that is, the value used to calculate capital gains taxes upon the sale of the house. If your mother leaves the house to your sister in her will or trust, your sister will take title to the entire house at the value it had upon your mother's death. If the property is worth a lot more now than it was when your mom originally purchased it, this can make a big tax difference down the road.
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