Taxes, Fees Incurred Selling Mom’s House

Taxes, Fees Incurred Selling Mom’s House

Rental Property Investor · SF Bay Area, CA · Member since 2015 · 206 posts · 156 votes

Hi BP Fam! Have a situation where my mom and her siblings are looking to sell their elderly mother’s single family house (who is alive and moving to a care home).

There is a living trust in place. Wondering what sort of taxes and fees they will incur as a result of selling this house? 

House is located just outside of San Francisco. Bought for $79k in the 1970s and now worth around $1M. 

PS - I would be interested in buying this house, but there are some family issues around jealousy, etc. and my mom won’t inform her siblings of my ability to purchase. Owner finance is tough with grandma’s mental state.

Any advice/input is appreciated. Thanks!



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  • Chris SeveneyBusiness Member
    Moderator
    Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes
    4y

    @Ana Marie B.

    You should talk to your attorney and cpa and see if it’s better to sell now or hold off on selling if it’s in a trust.

    Regarding taxes - same speak to your accountant for the tax ramifications

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  • Investor · Las Vegas, NV · Member since 2013 · 8k+ posts · 10k+ votes
    4y

    You’re facing at least an extra $100k in federal and $50k plus in state taxes if she sells while still alive, though if she’s receiving Medicare they’re ll want their money from the proceeds either way. If you think she’ll be in the nursing home more than 5-10 years you probably sell. Otherwise you’re saving $150k to wait. 

    IF you really would want it, even near market value then you get an appraisal and pay 3-5% less than that the realtor would have gotten anyway.  You could owner finance with a big downpayment to solve her money issues while also lowering her taxes a little. 

    Everybody’s situation is different. Good luck and all my best wishes for her health. 

  • Lender · CO CA TX WA ID OR · Member since 2020 · 419 posts · 542 votes
    4y

    @Ana Marie B. I know a probate attorney (I know your mom is still alive) and a good CPA here in the Bay Area. Feel free to send a DM

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