Avoid this tax #capitalgains

26 Sept 2023 · 1 min

Watch on YouTube

0:41

In this YouTube clip, Jerry Taylor advises viewers not to transfer a home into a child’s name because the child would inherit the original owner’s capital‑gains tax basis. Using a concrete example—buying a house for $150,000 that later appreciates to $650,000—he explains that the child would owe tax on the $500,000 gain when the property is sold. Taylor recommends instead placing the home in a revocable living trust so that, upon the owner’s death, the heirs receive a stepped‑up basis equal to the current market value, eliminating capital‑gains tax and allowing the property to pass outside probate. He ends with a call‑to‑action to join his newsletter for more estate‑planning advice.

Chapters

Do not transfer your assets to your kid's name. It may have seemed like a good idea at the time, but it's not. And this is especially true when it comes to your home. Let's say you bought your home years ago when it was $150,000. Now the house is worth $650,000. If you give that home to your child and put their name on the deed, when they try to sell it, they're going to have to pay the tax on that capital gain of $500,000. Here's the solution. Instead of giving them the home while you're alive, put it in a revocable living trust. That way, when you die, they will get your tax basis in that home and owe no capital gains tax. And the home will pass to them outside of probate court. Jump on my newsletter in my link.