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Can I add my daughter's name to my rental house as joint tenant , carry a loan without setting red flags to the IRS?

Livermore, CA |

I will sell 1/2 of the house to her which will ensure she gets the house should I die. I will need to pay capital gains and claim the interest on my taxes and she will get a 1098 from me. I don't want the IRS to come back with imputed income or gift tax. Can this be done with a quick deed and promissory note.

Attorney Answers 4

  1. My question is why do it this way. Gift taxes don't apply until you give more than a total of 5.25M in assets. Also, it you held until death your daughter would get a step up to fair market value. You would be wise to meet with an estate planning attorney for at least half hour.

    The general advice above does not constitute an attorney-client relationship: you haven't hired me or my firm or given me confidential information by posting on this public forum, and my answer on this public forum does not constitute attorney-client advice. IRS Circular 230 Disclosure: In order to comply with requirements imposed by the Internal Revenue Service, we inform you that any U.S. tax advice contained in this communication (including any attachments) is not intended to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing, or recommending to another party any transaction or matter addressed herein.

  2. There is a way to transfer assets without any "red flags" (conduct an arms length transaction) but the question is why would you do it that way if you are trying to plan your estate. If you are really trying to put your affairs in order, most Estate Planning Attorney's offer a free consultation. A half hour or an hour reviewing your assets and plans for your family could give you a lot more than the answer to this question, and give you ideas you haven't even considered yet.

    The information above should not be considered legal advice and does not create an attorney-client relationship.

  3. Agree with colleagues. If you need an attorney referral, go to the Alameda County Bar -

    Mr.Scalise offers a FREE consultation; he may be reached at 805-244-6850 or by email ( My responses to questions posted here intended as helpful legal information not legal advice. The information I post does not create an attorney-client relationship. Mr. Scalise is licensed to practice law in California. If you would like to obtain specific legal advice about this issue, you must contact an attorney who is licensed to practice law in your state, and retain him/her.

  4. I agree with attorneys Charles Schultz and Erik Hartstrom. Yes, you can add your daughter’s name to your rental house. This would be an exempt transaction in regard to the County Assessor’s Office for property taxes being a transfer from parent to child. Although, as previously suggested by other AVVO counsel herein, I think there are far better options for you and your daughter in regard to this transaction, which could be easily addressed by an Estate Planning attorney.

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