Q-I am a widow of 87 and am undecided what to do with my large house, which I can no longer maintain. Should I give it to my only heir, my devoted son, who is 56 and quite well off, or keep it as a rental house?
The rental income would be nice, as I am moving to a church-sponsored retirement home and I will need some extra income. But I’m not sure I am cut out to be a landlord at my age.
This house is worth around 10 times what my late husband and I paid for it about 30 years ago. What should I do?
A-If you give your home to your son now, he will take over your adjusted cost basis. I’ll presume that basis was increased when your husband died and you inherited his half of the house. The tax rule is that the recipient takes over the donor’s basis in gift property.
Because you apparently need extra retirement income to live in that retirement home, my recommendations are (1) keep your house as a rental property, or (2) sell it, use your “over 55 rule” $125,000 tax exemption, and carry back an installment sale mortgage to provide retirement income.
There is no law that says you must leave anything to your heirs. Why not enjoy your assets? In my opinion, giving your house to your well-to-do son now would be a major mistake because you can use the money to enjoy your “golden years.”
Q-When I was divorced about six years ago my ex-husband got half our property and I got the other half. But my problem is, somehow, his name never got removed from the house where we lived and I raised our two sons.
My ex-husband now is dead. I want want sell the house. A Realtor found a buyer, I accepted the offer-but and then we discovered the title problem. What should I do?
A-Your solution is to bring a quiet title lawsuit. That means you sue your deceased husband’s estate and his heirs. They might appear in court to contest your lawsuit but I doubt that will happen. Consult a local real estate attorney for details.
Q-Recently you explained to another reader how she can make a tax-free trade of one investment property for another. My question is whether you meant to say tax-free or just tax-deferred.
A-I am usually extremely careful to say “tax-deferred” when referring to an Internal Revenue Code 1031 exchange. You are, of course, referring to a property trade of a “like kind” exchange, such as an apartment building for a commercial building. These property trades are not tax-free because the tax is really deferred, often forever.
Q-In early March, we signed a 90-day listing with “Agent A.” About two weeks later, we received a nice letter from the brokerage manager saying our listing had been transferred to “Agent B” because our agent had quit the brokerage.
Can this we done without our approval? We chose the first agent because of her sales success in our neighborhood. Now she works for another broker. Are we stuck with “Agent B”?
A-Legally, your listing was with the broker, not with the sales agent. When she quit, your listing still was with the broker. Apparently, “Agent B” took over the first agent’s listings. If you don’t like the new “Agent B” who has been assigned to you, a reputable broker will either cancel your listing or assign you to an agent you prefer.
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The new Robert Bruss special report “The 10 Key Questions to Ask Before Buying Any Home” is available for $4 from Tribune Media Services, 435 N. Michigan Ave., Room 1408, Chicago, IL 60611.
Please note: Real estate laws differ from place to place, and laws of your area should be checked before making decisions on real estate problems. Letters should be addressed to Tribune Real Estate Features Service, P.O. Box 280038, San Francisco, Calif. 94128.
