Avoid Capital Gains Taxes (video)

Do you want to make your children pay more taxes than they absolutely need to?

That’s just what happens when you put your children on the deed. When you put your children on the deed, you’re making a gift, a part of your ownership of the house to them. This often leads to capital gains tax. When they sell it, they will owe the gains tax, but it won’t be calculated on what it was, what it was worth the day of the gift. It will be calculated on what it was worth the day you paid for the house.

How much will that cost them in taxes? Let’s take an example. You bought a house for $100,000. Your children sell it for $300,000. Now they will owe capital gains tax on the difference between the 300 and the $100,000. That is, they will own gains o gains tax on $200,000.

If the rate is 15%, that’s $30,000 in taxes.

However, if you plan properly, they will pay the difference on nothing in taxes. That is, they won’t owe any capital gains tax.

The other issue is you’re at risk of losing your house to their problems. If they get in an accident lawsuit, credit problems or tax trouble your house can be seized to pay for their problem.