From: "BMS" 
Newsgroups: misc.invest.financial-plan
Subject: Re: Capital Gains Taxes On 60K Condo Sale ??
Date: 11 Apr 2004 15:10:01 GMT
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	=AEsg

Given what state your in, this is going to probate.

For example in Massachusetts, simple probate ends at 15k. The state death
tax is back and the limits are lower. Getting proper documents from an
experienced estate attorney will probably cost in the $1500-1800 range.

In Massachusetts there is language for the special needs trust that may be
relevant.

This is the problem when you are looking for a generic answer to a question
that has at least 51 different twists.

If you respond with your state, you could get a little better direction.

"Caroline"  wrote in message
news:Mg5ec.4614$k05.483@newsread2.news.pas.earthlink.net...
> With all due respect, I'm really not buying into a lot of your worries
here.
> This is based on some experience with a few probate situations and a lot
of
> reading. Otherwise, I'm neither a lawyer nor accountant nor real estate
agent.
> Take the following for what it's worth:
>
> 1.
> Unless your state's probate system is all  messed up, or unless you choose
an
> incompetent executor, your estate is so small that it should fly through
the
> probate system. I doubt it will take over 1.5 years to distribute. (IIRC
most of
> the time is taken up by the IRS's end once the executor files the
appropriate
> IRS estate forms.) Probably at least a year will be necessary, though.
Even so,
> the condo may be sold well before a year has elapsed. More below.
>
> 2.
> Right now the minimum estate size for having to pay estate tax is about or
> exactly $1,000,000. As you may be aware, this is subject to change, but
are the
> Feds going to reach down to estates valued at under $100k anytime soon? I
doubt
> it. So your estate only faces capital gains taxes, and that's a big if.
More on
> cap gains taxes below.
>
> 3.
> One option for getting the approx. value of this condo to your son
a.s.a.p. is
> that in your will you simply direct the executor to dissolve all assets
and give
> the proceeds to the son. You never will the condo to your son directly;
only its
> value, less any costs of dissolving the estate. This way your son will
never
> legally be responsible for the monthly fees. I imagine the Condo
association
> will cut the executor of your estate the appropriate legal slack for
paying the
> fees while the Condo is for sale. What else can the Condo Assoc. do? My
personal
> experience supports this. The heirs never had to deal with condo or house
> maintenance fees. The executor dealt with it.
>
> 4.
> I'm not certain, but at your and your wife's deaths, the capital gain on
the
> sale of the condo may be exempt from tax. The first $250,000 on any real
estate
> capital gain on the sale of a home in which you lived and sold while you
were
> alive is exempt. The limit is $500,000 for both you and your wife. I tried
> Googling on the web to confirm this applies after you die and the  house
is sold
> but could not. It's a good question for misc.taxes.moderated and/or
misc.taxes.
>
> 5.
> You could talk over with your lawyer gifting this condo to your son while
you
> are alive over a three-year period. You and your wife may give up to
$22,000
> each year to a person without any tax consequences for either you,  your
wife,
> or the person. (Of course the question remains whether this would affect
your
> son's disability benefits.) Somehow, every year you'd adjust the deed such
that,
> as a matter of law, it reflected how much your son's % ownership of the
condo
> had changed. But taking this route might make your boy responsible for the
> monthly fees after you die and until it's sold. Also, it seems like this
would
> make your son responsible for selling the condo once you do die. Can your
son
> negotiate the sale of a condo? That is, can he find an agent to sell it
for him?
> (Not sure what kind of disability he has.) Also, your son would have legal
> responsibility for any claims made against the Condo. Maybe such claims
are
> unlikely, but one never knows.
>
> 6.
> As Leigh mentioned, do investigate a "special needs trust." The
peculiarities of
> a "special needs trust" seem very state-specific. As someone else pointed
out,
> it may not even be an option in your state. You could Google for {"special
needs
> trust" and your-state's-name} and maybe go in a little prepared for your
meeting
> with your estate planning/will lawyer.
>
> 7.
> Seems to me the only taxes that might be owed on all this (after your
deaths)
> are possibly a state inheritance tax. Depending on what state your son
resides
> in, he may have to pay a small tax on whatever he inherits. Many states
have no
> such inheritance tax. Anyway, this is easily checked on the Internet.
>
> 8.
> It sounds like you're also considering some sort of living trust in which
you
> would place the condo. I am doubtful this would save your tiny estate any
> significant money at probate time.
>
>
> I hope you have a good executor in mind. The best counsel I've seen is
have a
> relative and a non-relative be executors, with preferably one of them
being a
> lawyer with experience in probate. Or, for such a tiny estate, you could
have a
> trusted non-relative with legal experience be the executor.
>
> Updates for posterity are welcome. I'm sure your experience will help
others.
>
>  wrote
> > My wife and I want to leave my disabled son our small estate that
> > consists of a 60K condo.
> > He lives in another state in subsidized housing and could not afford to
> > carry our condo so I would want him to sell it and get the most out of
> > it upon our death.  Thanks to all who answered my previous post saying a
> > will would be the best way to accomplish this over adding his name to
> > the deed.  I was wondering if you took this into consideraton when you
> > said a will was best.  I understand a will can take 1-3 years to go thru
> > probate.  In that time my son would need to pay the $300. monthy cost to
> > carry this condo.  If his name were put on the deed now could'nt he sell
> > it right away and avoid the cost of carrying it for some time ?  You
> > advised me that adding his name to the deed would cause him to owe
> > capital gains taxes when he sold the condo.  Seeing his income is only
> > $8000 yearly I wondered what his capital gain would be on 60K or less
> > after expenses?  I guess it comes down to what would cost more in the
> > end,  paying capital gains right away or carrying the property until the
> > will went thru probate ??
>
>