Yes, I’m in Canada.
Thanks, I will definitely ask Accountant to handle this, but need to know what is the best way to minimize the captial gain and if possible to use my mother big carryfoward capital lost. I will ask Accountant about this. It is not easy to understand. Before I help my family to transfer the title, I will make sure everything is confirmed from the accountant and Estate lawyer.
Just so you know, any title transfer will be considered a deemed sale at fair market value and there will be tax consequences. The lawyer might use the word “gift” but that doesn’t mean no capital gain. So when you talk about transferring title, you are basically talking about selling the assets.
In a real situation, the real lawyer would have this in the working papers, as would the real CPA.
This is not one of those situations.
IMHO, none of what has been posted here jibes, and nor does it make any sense.
Hi Versa,
For 1, how does it transfer tax free? What if joint tenancy interest held by sister was a bare trust and estate administration arrangement? Assets held under joint tenancy might transfer free of probate fee and not always tax free.
If joint tenant 1(sister) paid fair market value for own share upon transfer/acquisition, the portion belonging to transferring joint owner(upon death) will still be subject to regular deemed disposition rule at death.
There might even be issues with the sister reporting the entire rental income on her own return, and other joint tenant, who likely should be the beneficial owner not doing so. The fact that only joint tenant 1( sister) reported rental income on return does not necessarily make her the beneficial owner.
The legal acquisition and transfer documents should be the ideal determinant of who the beneficial owner should be.
We don’t have the full facts and it is best that the poster contact tax specialists in this area of practice as earlier advised by others.
Thanks.
FA.
Agreed @Folorunso - we do not have all of the information and the OP definitely needs to seek professional advice. I have been very clear on that! However for general discussion purposes, if the beneficial owner is the sister, both income and probate tax are based on beneficial ownership, so no change in beneficial ownership means no taxable event.
This board is always for general discussion purposes and should never be taken as professional advice!
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@Arliss Where were you all this time?? Easy to see that tax season rush is over!! 2 weeks ago he would have been lucky to get a response and then it would just have been "This forum is for professional tax preparers using a specific software product. You should contact estate experts."
What I mean transferring the title is the title transfer from my mom to whoever my family members only. As far as I understand, the executors (either my father or me) will tell the lawyer to perform this action once all family members agree on it.
For #1, in addition to my sister being the only person reporting the rental income for tax purposes, my mother had gifted her the funds to purchase the apartment, as well as cash to cover the ongoing monthly expenses. My sister has full control over the apartment and has been collecting all rental income from it.
Thank you again for all the information. I will definitely consult an accountant for professional advice. Getting different opinions helps me prepare before meeting with the lawyer and accountant, so I can minimize the number of trips. It has been very exhausting handling my mother’s affairs after her passing.
I respond to enough “lay questions” on Reddit - which is a better place for that kind of thing (ie educating taxpayers). I prefer the TaxCycle forum for actual professional dialogue…it’s hard enough to find - other than TaxBoard - a spot where people understand that tax is LAW and that guessing, or suggesting that something will work is not really good enough for us.
Even here sometimes..the responses are disappointing.
Personally I try to ignore the non-pro questioners here if I can figure out who is/isn’t. Just an opinion.
Kind of interesting how the general public sees this. Do a few more estates and you sure will learn.