How does transfer of property from parent to child affect us- taxes, credit, etc?

My mom%26#039;s considering transferring her property to me. I%26#039;m 23, married 1.5 years, with sub-prime credit (nothing bad on my report, I just haven%26#039;t had credit very long). My husband has non-existent credit.

There are two fully paid off properties, total value of about $800k-1m. My parents live in one, and rent the duplex to my two sisters.

Are there different ways to do this? Sale vs gift, etc? What taxes would have to be paid?

Would it affect our credit scores?

I%26#039;m sure it%26#039;ll affect financial assistance for us, but work pays my husband%26#039;s college tuition anyway.

I would imagine that it%26#039;ll prevent future first-time buyer incentives for us. Is that a big deal? What are other affects on our potential future home purchase?

I don%26#039;t want to discourage my parents from doing it, because they haven%26#039;t written a will (I%26#039;m trying to get them to) and this will prevent some in-fighting if my husband and I split the assets when they%26#039;re gone. I just want to get the facts first and do it right.

How does transfer of property from parent to child affect us- taxes, credit, etc?

You have to pay a gift tax on any thing over $10k annually not $1M. They can put the house in your name for $1.00 so you would not have to pay anything. I would recommend them putting it into a revocable Living Trust instead. That is nice that they want to put it into your name but what if there is a fire? What if they are not able to the taxes? You would be responsible. If the house is left to you in a trust you will have to pay inheritance tax if you are over $1M (it might be less now) BUT you would not have to put it into probate and that will save you a lot of money. Plus the house goes just to you not your spouse as long as you keep it separate. Plus you control the house. You could sell it or mortgage it and that would not be good for them. Not that you would but your husband could.

How does transfer of property from parent to child affect us- taxes, credit, etc?

the recipient will have to pay a gift tax. Speak to a tax attorney instead of getting the info from a bunch of schlubs like us.

How does transfer of property from parent to child affect us- taxes, credit, etc?

It%26#039;s done all the time but usually with the assistance of a CPA and an attorney. You asked alot of questions so instead of giving you all my opinion since opinions are like lawyers (everyone has one) I won%26#039;t give you mine instead I%26#039;ll give you the links you need to get the answers.

IRS: Selling your Home Publication: http://www.irs.gov/publications/p523/ind... and http://www.irs.gov/publications/p523/ar0...

IRS: Home Sale Exclusion rules, publication: http://www.irs.gov/newsroom/article/0,,i...

IRS: Estate and Gift Taxes:

http://www.irs.gov/businesses/small/arti...

IRS: Tax information when buying a home: http://www.irs.gov/publications/p530/ix0...

IRS: Deductible costs when purchasing real property:

http://www.irs.gov/publications/p551/ar0...

IRS: 3.6 Itemized Deductions/Standard Deductions: 6. Real Estate (Taxes, Mortgage Interest, Points, Other Property Expenses): http://www.irs.gov/faqs/faq3-6.html

When all else fails you might want to go to the one that governs on these issues:

IRS: Contacting your local IRS office: http://www.irs.gov/localcontacts/index.h...

Buena Suerte

How does transfer of property from parent to child affect us- taxes, credit, etc?

you have a gift tax for anything higher than $1M. It is best to check with a tax professional on this, however, because any mistake could mean you lose the property, and your credit goes even lower. You may have to pay state taxes, again though, check with a tax professional because you may be able to deduct that amount from income taxes. It varies by state.

How does transfer of property from parent to child affect us- taxes, credit, etc?

Buy the property for $10.00. Its not a gift if purchased.