FAQ Friday: Real Estate
At our FAQ Friday on April 16th, 2021, Mr. Berger discusses what to do when: "My father left everything to my brother and myself. All the expenses have been paid. There is $300,000 in the Estate account and a $300,000 house. I want to buy the house. What is the best way to transfer the property?"
One of two ways: transfer house to you and your brother and you buy his half or the more efficient option is to do a distribution agreement. You agree to give up claim to the cash and your brother agrees to give up claim to house. Advantage is only 1 deed and we avoid transfer taxes. Distribution from an estate to an heir are free from transfer taxes which can be high.
The PR (legal seller) doesn’t live in the house and can sell without making any warranties. There is usually no gain on the house so it is fair market adjusted on date of death. Selling costs can be written off against it.
This is usually the biggest asset in the estate. Really important to guard that value and distribute with minimal taxes and fees.
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