Inheriting a property

[Jacob Perkins]

This seemed like the right forum to post, but if it isn't, I apologize in advance.

My father just recently closed on a property in which he bought it from the owner for roughly $17k.  He saw that the property was in distress, the previous owner was clueless, and that he could fix it up and possibly turn it into a rental.  He is doing this partly because he knows I am interested in real estate investing and partly because he wants to leave behind something that could help me financially.  My question is in regard to actually inheriting the property.  I'm just a beginner and as I continue to do research in real estate & estate planning I am brought to trusts.  Would it be possible for me to create a trust, my dad transfer title into the trust, and for the trust to technically have control over the property rather than it being in my name?  If so, would this be considered a sale or a gift?  and if this were the case, then would I need to take taxes into account?  Does anyone have any advice for a beginner on what steps to take regarding inheriting a property and if there are certain things to watch out for or avoid?

[Lance Lvovsky]

Originally posted by @Jacob Perkins:

This seemed like the right forum to post, but if it isn't, I apologize in advance.

My father just recently closed on a property in which he bought it from the owner for roughly $17k.  He saw that the property was in distress, the previous owner was clueless, and that he could fix it up and possibly turn it into a rental.  He is doing this partly because he knows I am interested in real estate investing and partly because he wants to leave behind something that could help me financially.  My question is in regard to actually inheriting the property.  I'm just a beginner and as I continue to do research in real estate & estate planning I am brought to trusts.  Would it be possible for me to create a trust, my dad transfer title into the trust, and for the trust to technically have control over the property rather than it being in my name?  If so, would this be considered a sale or a gift?  and if this were the case, then would I need to take taxes into account?  Does anyone have any advice for a beginner on what steps to take regarding inheriting a property and if there are certain things to watch out for or avoid?

 That would be a gift. A gift tax return would need to be filed if your dad transfers property to a Trust, and the transfer is a completed gift. Your dad would likely owe no gift tax - I assume he still has his lifetime exemption. It is really a conversation you should have with an attorney (who can draft the documents) and a CPA who can explain to you gift tax implications, Trust tax administration, etc.