ncCPAp on the GO!

Basis of home to child , retained life estate deeded or trust

  • 1.  Basis of home to child , retained life estate deeded or trust

    Platinum Most Valuable Member
    Posted 06-21-2019 08:32
    I am interested in the tax basis to the "donee child"  when a parent gifts a home to a child, but retains a life estate.

    i know this  can be accomplished various ways, two of which i will mention which are :
    • Deeding the home directly, and retaining a life estate, or
    • Using a trust, gifting it to the trust and retaining a life estate, like a medicare trust. Grantor in nature

    I do understand there may be reasons why a trust should be used other than tax, but my questions is about tax

    In each of the two situations would the basis of the house be stepped up identically. ?


    Gift tax returns at the time of the gift:
    it seems from answers to another question posted that a gift tax return would be required at the time of the gift if directly deeded with the retained life estate, but would that also be true if it were gifted to a "medicare type trust" ?


    Abby

    ------------------------------
    Abby Alhante
    KURCIAS & ALHANTE, CPAs LLC
    Melville NY
    ------------------------------