Agent

Joint property owners seek capital gains shelter in living trust

But situation won't affect stepped-up-basis benefits

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DEAR BOB: After reading your articles, I am convinced of the living-trust benefits for owning my properties and avoiding probate. My son and I have jointly owned a residential property for 10 years. I have advised him that we will both sign a deed to transfer title to the living trust. My son and daughter will be the beneficiaries of the living trust. Will they now inherit the rental property with a stepped-up basis on the date of my death to avoid capital gains tax? – Don F. DEAR DON: No. If you die first, presuming you and your son are equal co-owners, your surviving son will receive a 25 percent interest in your share of the property and your daughter will receive the other 25 percent from you. The basis on your half of the property will then be stepped-up to market value on the date of your death. Purchase Bob Bruss reports online. Your son's adjusted cost basis for his 50 percent of the property will remain unchanged. A living trust has no effect on the stepped-up basis ...