I co-own a house with my Mom. Should I move it under my name 100%?
I purchased a house as a non-occupant buyer with Mom a year ago. It is her home. Good decision at the time for a few reasons and I put down the full down payment (20%). I am thinking that long term that it would be best if the house is fully under my name to reduce liability for both of us (she is 70+). I have the extra funds to pay it off and could get a 2nd mortgage later if needed.
Two questions:
Would you agree with my assessment that it would be best if the house is only in my name to reduce liability? Her monthly payment will be lower and we would both still make money once it is sold.
How do we go about transferring to my name 100% after I pay off the mortgage with no tax implications? Do we go to the county and transfer ownership?
thank you
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If it's in your name and you don't live there, there's a number of issues. If you charge her rent, it needs to be at fair value to treat it as a rental property.
If she lives there for the next 20 years, it will (or we hope) gain value. If she passes while it's in her name you get to step up the basis, and avoid tax. If in your name , the gain would be taxable.
Sit down with professional with knowledge about eldercare issues. Know how your options regarding the property ownership can impact the services they qualify for. Even making a change in ownership can impact their eligibility for certain programs. Some of which can reach back to events in the recent past. Also if you own it but she will get some of the profits when you sell, she could still be considered an owner, which can impact eligibility for programs.
This is in addition to the issues with the lender, the IRS, and your estate.
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