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  1. #1
    Join Date
    Oct 2007
    Posts
    28

    Default Avoiding Taxes - Homestead, Inheritance or Gift

    My question involves estate planning in the state of: Michigan

    Sally and Judy are sisters and their mother Betty died last year. Judy (the personal representative) is on title of Betty’s paid-off house $50,000 house but does not live there. Sally is not on the title but does live there. Sooner or later they are going to sell the house but it may take a long time in this market. There are 3 other siblings. All 5 are to split up the proceeds equally.

    Question #1: When the house gets sold – what kind of taxes will have to be paid? (Inheritance? Gift?)

    Question #2: If Sally is quit-claimed onto the title now to avoid paying non-homestead property taxes before the house gets sold – will that effect the kind of taxes will have to be paid when the house gets sold?

    Thanks!

  2. #2
    Join Date
    Sep 2005
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    Behind a Desk
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    98,846

    Default Re: Avoiding Taxes - Homestead, Inheritance or Gift

    With a $50,000 estate, gift and estate taxes aren't an issue. But adding somebody to the title can create a lot of problems and issues, as well as the immediate need to file a gift tax return.

  3. #3
    Join Date
    Oct 2007
    Posts
    28

    Default Re: Avoiding Taxes - Homestead, Inheritance or Gift

    will they pay any taxes if they just sell the house and split up the money? Only the sister (daughter) is on the title - the other children are not.

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