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The kids will be killed on taxes since if you add them to the deed they get your basis . If they inherit it they get todays value . Half the house will count as dollars that have to be spe t down in order to even qualify for medicaid
Isn't there a 250K cap gains exemption? (for singles) One amount for most sales, and another for sellers over 55. (125K). That will negate some of that, no?
I some parts of the country the house itself isn't' worth 200K, let alone a profit of more than 250K.
Repped you for that excellent post! I don't suppose you have your SS statements from when you were, say 60, that stated your age 70 predicted SSI, so that amount can be compard to what you are predicted to get at 70, now, do you? It would SO help to reinforce the numbers that people plan with vs the reality.
What I am projected to receive at age 70 now, just two years away, is just short of $200 more than what was projected at age 70 when i was 62.
I would love to have the money now, I don't need it but who doesn't like extra money, but with taxes and all it just doesn't make sense.
The way I am making it between 66 and 70 is think what I am getting for "free" for the rest of my life when I do hit 70.
In the past 2 years I have gained enough in benefits to pay for internet, cable television, cell phones with unlimited phone, text and 10 gigs data for my wife and I and a decent dinner for two twice a month for as long as we live.
Decent dinner for two? We seldom drink alcohol and most of the time we split a meal and still go home with a doggie bag. Decent meal for two is $40 which is fine for us.
I'm like 25 years out from retirement but I was wondering how the gov't does the increases for ss? Is there a set increase based on col over the years?
Isn't there a 250K cap gains exemption? (for singles) One amount for most sales, and another for sellers over 55. (125K). That will negate some of that, no?
I some parts of the country the house itself isn't' worth 200K, let alone a profit of more than 250K.
Or am I confused about that?
No , the kids would actually not only have to live there for a number of years as a primary but because they were added to an existing deed the exclusion would be prorated over the time it was owned by mom vs the time the used it as a primary . So if the house was owned 30 years and they used it 5 years as their primary they would get 1/6 of the exclusion.
They only get the full exclusion when they buy a house and it is their primary day 1
I'm like 25 years out from retirement but I was wondering how the gov't does the increases for ss? Is there a set increase based on col over the years?
They adjust it every year based on the cpi index they use .
Sorry I'm so dense…so if the house was say 37 years old (parent was the original owner, so age of house equals how long they owned it) when the transfer took place, and the adult child kept it as a second home for 10 years, then lived in at as a primary residence for 20 years before it was sold??? what would that work out to mean?…
Thanks.
ETA: That adult child ends up getting 'about" 1/2 the exclusion, let's call it 40 %.
In today's dollars 40% of 250K is 100K (if my math is right) so if they sell the house for 180K cap gains is only paid on 80K? Sell it for 200K, taxes paid on 100K. Sounds good enough to me. If I've got the figurin' right.
Adding some one to a deed is different than buying a house or inheriting a house.
As of 2009 tax laws changed.
When you own a 2nd home or investment property and convert it to a primary the exclusion is prorated.
We had a 2nd home we were going to retire to . If we owned the home 6 years and decided to move in and sold 4 years later we would have owned the home 10 years , had it as a primary for 4 so we get 40% of 500k as an exclusion as a couple
The house I'm thinking of was "sold" at a very, very steep discount, like next to nothing.
In this case the adult child, one prays, will get to live in the house for a nice long retirement him/herself, at least 20 years.
With any luck it's grandfathered, who knows maybe old tax laws will apply due to transaction day because this was done well over a decade ago.
In any event, I'm sure the family CPA will sort it out when and if the time comes.
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