2nd Public Service about Property Taxes…may even save you money!

[surveyor]

I haven’t come across this situation before and I only spoke of it very superficially with a lawyer related to me, so take what I say with a grain of salt.

Still, from the County’s website:

Q: Is there a filing deadline for this exclusion?

A: A claim must be filed within three years of the date of transfer or death, or prior to the sale or transfer to a third party. In addition, a claim may be filed within six months after the mailing date of the supplemental notice or escape assessment.

Q: Is there anything I can do after the deadline?

A: If a claim is filed after the legal deadline, the exclusion may be granted but no refunds will be issued for prior years. It will be granted for the year the claim is filed as long as the property has not been sold to a third party.

So if your client can get the paperwork done, they may at least get their future tax bills fixed.

Now, somewhere else in the page, this was an interesting find as well:

LIVING TRUSTS

– Real property is frequently placed into a trust for income tax or inheritance purposes. Generally, the creation of a trust does not cause a reassessment for property tax purposes. For more information concerning the possible property tax consequences of a trust, please call the Assessor’s Office at (858) 505-6262.

Q: What is a trust?

A: A trust is a legal arrangement whereby property is held by one party for the benefit of another (beneficiary) for a specific length of time.

Q: Does placing real property into a trust cause a reassessment for property tax purposes?

A: Generally, placing real property into a trust is not a change in ownership that causes a reassessment as long as you are the sole owners, the trust is revocable or the beneficial interest is not transferred.

So by the wording, it is possible for someone to transfer their tax basis to their child (using the parent/child exclusion) and then transfer the property into a trust for said child…

It definitely sounds like something worth pursuing… Talk to the County people, they are generally helpful about these things. They won’t hold your hand during the process, but they will tell you what to do.

[Coronita]

Thanks for the info Surveyor. From my experience last year, I can confirm that living trusts don't trigger reassessments.

But to my understanding, Living Trusts are more for the benefit of avoiding inheritance taxes (or removing amounts off of what can be taxed). Living Trusts don't offer that much asset protection, which is also what I'm looking for. Unfortunately, living in CA, it's to my understanding that your primary home is not immune to being taken if you get sued, etc. Short of having good insurance, I was just curious if there was a way to avoid reassessment by passing on property to the next generation, escaping some of the inheritance taxes, AND also have some level of asset protection (hence putting things in a corp). I'll talk to a lawyer and an cpa and share what i find out.

 

I also talked to my parents about things. I believe also, that if you move between certain counties and have to sell your home in one and buy another one in the other, that in some cases you can avoid reassessment too. For example, if my parents were to sell their home in L.A. and move down to S.D., my parents were saying there were some rules that would allow them to preserve the same tax assessment basis they had in L.A. since 1980. I think it's only permitted for senior cits. I'm not sure what the details are, but one thing is that when you buy the new property, it has to be near equal in value or less to what you just sold, and there is a time window. I haven't read the details myself, since it doesn't apply to me. Something like Proposition 90 :

http://www.diablovalley.net/senior-living.html

[Coronita]

Thanks for the info Surveyor. From my experience last year, I can confirm that living trusts don't trigger reassessments.

But to my understanding, Living Trusts are more for the benefit of avoiding inheritance taxes (or removing amounts off of what can be taxed). Living Trusts don't offer that much asset protection, which is also what I'm looking for. Unfortunately, living in CA, it's to my understanding that your primary home is not immune to being taken if you get sued, etc. Short of having good insurance, I was just curious if there was a way to avoid reassessment by passing on property to the next generation, escaping some of the inheritance taxes, AND also have some level of asset protection (hence putting things in a corp). I'll talk to a lawyer and an cpa and share what i find out.

 

I also talked to my parents about things. I believe also, that if you move between certain counties and have to sell your home in one and buy another one in the other, that in some cases you can avoid reassessment too. For example, if my parents were to sell their home in L.A. and move down to S.D., my parents were saying there were some rules that would allow them to preserve the same tax assessment basis they had in L.A. since 1980. I think it's only permitted for senior cits. I'm not sure what the details are, but one thing is that when you buy the new property, it has to be near equal in value or less to what you just sold, and there is a time window. I haven't read the details myself, since it doesn't apply to me. Something like Proposition 90 :

http://www.diablovalley.net/senior-living.html

[Coronita]

Thanks for the info Surveyor. From my experience last year, I can confirm that living trusts don't trigger reassessments.

But to my understanding, Living Trusts are more for the benefit of avoiding inheritance taxes (or removing amounts off of what can be taxed). Living Trusts don't offer that much asset protection, which is also what I'm looking for. Unfortunately, living in CA, it's to my understanding that your primary home is not immune to being taken if you get sued, etc. Short of having good insurance, I was just curious if there was a way to avoid reassessment by passing on property to the next generation, escaping some of the inheritance taxes, AND also have some level of asset protection (hence putting things in a corp). I'll talk to a lawyer and an cpa and share what i find out.

 

I also talked to my parents about things. I believe also, that if you move between certain counties and have to sell your home in one and buy another one in the other, that in some cases you can avoid reassessment too. For example, if my parents were to sell their home in L.A. and move down to S.D., my parents were saying there were some rules that would allow them to preserve the same tax assessment basis they had in L.A. since 1980. I think it's only permitted for senior cits. I'm not sure what the details are, but one thing is that when you buy the new property, it has to be near equal in value or less to what you just sold, and there is a time window. I haven't read the details myself, since it doesn't apply to me. Something like Proposition 90 :

http://www.diablovalley.net/senior-living.html

[Coronita]

Thanks for the info Surveyor. From my experience last year, I can confirm that living trusts don't trigger reassessments.

But to my understanding, Living Trusts are more for the benefit of avoiding inheritance taxes (or removing amounts off of what can be taxed). Living Trusts don't offer that much asset protection, which is also what I'm looking for. Unfortunately, living in CA, it's to my understanding that your primary home is not immune to being taken if you get sued, etc. Short of having good insurance, I was just curious if there was a way to avoid reassessment by passing on property to the next generation, escaping some of the inheritance taxes, AND also have some level of asset protection (hence putting things in a corp). I'll talk to a lawyer and an cpa and share what i find out.

 

I also talked to my parents about things. I believe also, that if you move between certain counties and have to sell your home in one and buy another one in the other, that in some cases you can avoid reassessment too. For example, if my parents were to sell their home in L.A. and move down to S.D., my parents were saying there were some rules that would allow them to preserve the same tax assessment basis they had in L.A. since 1980. I think it's only permitted for senior cits. I'm not sure what the details are, but one thing is that when you buy the new property, it has to be near equal in value or less to what you just sold, and there is a time window. I haven't read the details myself, since it doesn't apply to me. Something like Proposition 90 :

http://www.diablovalley.net/senior-living.html

[Coronita]

Thanks for the info Surveyor. From my experience last year, I can confirm that living trusts don't trigger reassessments.

But to my understanding, Living Trusts are more for the benefit of avoiding inheritance taxes (or removing amounts off of what can be taxed). Living Trusts don't offer that much asset protection, which is also what I'm looking for. Unfortunately, living in CA, it's to my understanding that your primary home is not immune to being taken if you get sued, etc. Short of having good insurance, I was just curious if there was a way to avoid reassessment by passing on property to the next generation, escaping some of the inheritance taxes, AND also have some level of asset protection (hence putting things in a corp). I'll talk to a lawyer and an cpa and share what i find out.

 

I also talked to my parents about things. I believe also, that if you move between certain counties and have to sell your home in one and buy another one in the other, that in some cases you can avoid reassessment too. For example, if my parents were to sell their home in L.A. and move down to S.D., my parents were saying there were some rules that would allow them to preserve the same tax assessment basis they had in L.A. since 1980. I think it's only permitted for senior cits. I'm not sure what the details are, but one thing is that when you buy the new property, it has to be near equal in value or less to what you just sold, and there is a time window. I haven't read the details myself, since it doesn't apply to me. Something like Proposition 90 :

http://www.diablovalley.net/senior-living.html

[surveyor]

That tax assessment basis transfer from one county to another is what I was talking with my attorney relative with awhile back. I didn’t understand it at the time but he was basically going to somehow transfer his tax basis and residence from San Francisco (very high) to Guam (very low). I should have grilled him further for more details. I didn’t understand the process at the time.

As for setting up the LLC with the living trusts and all that, that is way over my head. I keep promising the wife to take a look at it, but it’s been difficult…

[surveyor]

That tax assessment basis transfer from one county to another is what I was talking with my attorney relative with awhile back. I didn’t understand it at the time but he was basically going to somehow transfer his tax basis and residence from San Francisco (very high) to Guam (very low). I should have grilled him further for more details. I didn’t understand the process at the time.

As for setting up the LLC with the living trusts and all that, that is way over my head. I keep promising the wife to take a look at it, but it’s been difficult…

[surveyor]

That tax assessment basis transfer from one county to another is what I was talking with my attorney relative with awhile back. I didn’t understand it at the time but he was basically going to somehow transfer his tax basis and residence from San Francisco (very high) to Guam (very low). I should have grilled him further for more details. I didn’t understand the process at the time.

As for setting up the LLC with the living trusts and all that, that is way over my head. I keep promising the wife to take a look at it, but it’s been difficult…

[surveyor]

That tax assessment basis transfer from one county to another is what I was talking with my attorney relative with awhile back. I didn’t understand it at the time but he was basically going to somehow transfer his tax basis and residence from San Francisco (very high) to Guam (very low). I should have grilled him further for more details. I didn’t understand the process at the time.

As for setting up the LLC with the living trusts and all that, that is way over my head. I keep promising the wife to take a look at it, but it’s been difficult…

[surveyor]

That tax assessment basis transfer from one county to another is what I was talking with my attorney relative with awhile back. I didn’t understand it at the time but he was basically going to somehow transfer his tax basis and residence from San Francisco (very high) to Guam (very low). I should have grilled him further for more details. I didn’t understand the process at the time.

As for setting up the LLC with the living trusts and all that, that is way over my head. I keep promising the wife to take a look at it, but it’s been difficult…

[SD Realtor]

4plex, surveyor, flu – thanks for the posts.

fsd you were utterly useless…. heheheh… j/k…

Anyways ca-renter I did not check to see what sort of transfer was made between the parents and the children. However I may have not made it clear in the original post. Many years ago the parents downsized and purchased this home. When they did that they carried the new lower basis which was sweet. Then about 2.5 years ago the kids obtained the home, not sure how they obtained it.

Anyways good input guys.

SD Realtor

[SD Realtor]

4plex, surveyor, flu – thanks for the posts.

fsd you were utterly useless…. heheheh… j/k…

Anyways ca-renter I did not check to see what sort of transfer was made between the parents and the children. However I may have not made it clear in the original post. Many years ago the parents downsized and purchased this home. When they did that they carried the new lower basis which was sweet. Then about 2.5 years ago the kids obtained the home, not sure how they obtained it.

Anyways good input guys.

SD Realtor

[SD Realtor]

4plex, surveyor, flu – thanks for the posts.

fsd you were utterly useless…. heheheh… j/k…

Anyways ca-renter I did not check to see what sort of transfer was made between the parents and the children. However I may have not made it clear in the original post. Many years ago the parents downsized and purchased this home. When they did that they carried the new lower basis which was sweet. Then about 2.5 years ago the kids obtained the home, not sure how they obtained it.

Anyways good input guys.

SD Realtor

[SD Realtor]

4plex, surveyor, flu – thanks for the posts.

fsd you were utterly useless…. heheheh… j/k…

Anyways ca-renter I did not check to see what sort of transfer was made between the parents and the children. However I may have not made it clear in the original post. Many years ago the parents downsized and purchased this home. When they did that they carried the new lower basis which was sweet. Then about 2.5 years ago the kids obtained the home, not sure how they obtained it.

Anyways good input guys.

SD Realtor

[Author]

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