Changing Joint ownership of a property from joint to single ownership?

My dad and I bought a multifamily property together a number of year ago, so we jointly own it. As he has gotten older, we started talking about transferring ownership to me as the sole owner. What is the process and tax implications for going from joint ownership to sole ownership? Is this a complicated legal process? Alternately, from a tax and legal standpoint, does it make more sense just to leave it as-is and I would take over sole ownership in the case he passes away? Any advice appreciated, both in terms of financial/taxes and also from the actual process involved. Thanks all!

stickerhappy

in Landlord 9 years and 4 months ago

10

Please log in, in order to post replies!

10 replies

Newest Oldest

EJR | 9 years and 4 months ago

string(1) "1"
object(WP_User)#5062 (8) {
  ["data"]=>
  object(stdClass)#4889 (12) {
    ["ID"]=>
    string(5) "79362"
    ["user_login"]=>
    string(3) "EJR"
    ["user_pass"]=>
    string(34) "$P$B.h6vu7ImM77fV6j0TvRwlieo3mAr4/"
    ["user_nicename"]=>
    string(3) "ejr"
    ["user_email"]=>
    string(19) "ejrothman@gmail.com"
    ["user_url"]=>
    string(46) "http://bstoner.wpengine.com/forums/users/ejr2/"
    ["user_registered"]=>
    string(19) "2017-08-10 14:30:58"
    ["user_activation_key"]=>
    string(0) ""
    ["user_status"]=>
    string(1) "0"
    ["display_name"]=>
    string(3) "EJR"
    ["spam"]=>
    string(1) "0"
    ["deleted"]=>
    string(1) "0"
  }
  ["ID"]=>
  int(79362)
  ["caps"]=>
  array(2) {
    ["subscriber"]=>
    bool(true)
    ["bbp_participant"]=>
    bool(true)
  }
  ["cap_key"]=>
  string(15) "wp_capabilities"
  ["roles"]=>
  array(2) {
    [0]=>
    string(10) "subscriber"
    [1]=>
    string(15) "bbp_participant"
  }
  ["allcaps"]=>
  array(4) {
    ["read"]=>
    bool(true)
    ["level_0"]=>
    bool(true)
    ["subscriber"]=>
    bool(true)
    ["bbp_participant"]=>
    bool(true)
  }
  ["filter"]=>
  NULL
  ["site_id":"WP_User":private]=>
  int(1)
}

snowman2, to unpack your situation, there are two issues at play. One is the mortgage and the other is the deed. The bank required your father to act as a guarantor of your loan, but that doesn’t mean he also had to be on the deed. The deed could still have been in your name alone. Conversely a bank will also permit two people to be on a deed but only one person on the hook for the mortgage. This is common where a married couple can obtain favorable mortgage rates if only one person is on the loan (this commonly occurs if one partner has a lot of debt or owns their own business, both of which can make it hard to qualify for a loan). The bank doesn’t care what the deed says because the loan paperwork permits them to foreclose on the house either way. Anyway, you do raise a good point that what stickerhappy is proposing could result in a change of ownership that is a taxable event. If there is a mortgage it may also require the consent of the lending bank. I THINK (but the OP should still get legal and financial advice) that if the deed is simply changed from TIC to Joint Tenants with ROS then taxes and mortgage implications may be avoided since there will be no actual change in ownership.

snowman2 | 9 years and 4 months ago

string(1) "1"
object(WP_User)#5061 (8) {
  ["data"]=>
  object(stdClass)#4899 (12) {
    ["ID"]=>
    string(5) "44724"
    ["user_login"]=>
    string(8) "snowman2"
    ["user_pass"]=>
    string(34) "$P$BDP80X2Moanat7f.BJt0mvubJXx6xN/"
    ["user_nicename"]=>
    string(8) "snowman2"
    ["user_email"]=>
    string(18) "j_marali@yahoo.com"
    ["user_url"]=>
    string(0) ""
    ["user_registered"]=>
    string(19) "2010-02-19 23:49:09"
    ["user_activation_key"]=>
    string(0) ""
    ["user_status"]=>
    string(1) "0"
    ["display_name"]=>
    string(8) "snowman2"
    ["spam"]=>
    string(1) "0"
    ["deleted"]=>
    string(1) "0"
  }
  ["ID"]=>
  int(44724)
  ["caps"]=>
  array(1) {
    ["bbp_participant"]=>
    bool(true)
  }
  ["cap_key"]=>
  string(15) "wp_capabilities"
  ["roles"]=>
  array(1) {
    [0]=>
    string(15) "bbp_participant"
  }
  ["allcaps"]=>
  array(1) {
    ["bbp_participant"]=>
    bool(true)
  }
  ["filter"]=>
  NULL
  ["site_id":"WP_User":private]=>
  int(1)
}

I purchased my house with my father on paper to satisfy the bank. I could not qualify for the mortgage alone but my father knew I could do it. No money changed hands. As soon as I qualified for the mortgage alone I refinanced and changed the ownership to me alone. The cost to transfer the title was minimal. Even though it was submitted to the city as a transfer to me for $10 (iirc), the city figured half the value of the house and charged me transfer tax on that amount. It wasn’t half the actual market value, it was less, but I don’t remember exactly how they figured it. It wasn’t worth fighting with them. It was worth it to have no question that I was sole owner.

daveinbedstuy | 9 years and 4 months ago

string(1) "1"
object(WP_User)#4896 (8) {
  ["data"]=>
  object(stdClass)#5064 (12) {
    ["ID"]=>
    string(4) "3864"
    ["user_login"]=>
    string(13) "daveinbedstuy"
    ["user_pass"]=>
    string(34) "$P$BtJYyObAQmff2MQp.qFP7/kmwU1bBZ1"
    ["user_nicename"]=>
    string(13) "daveinbedstuy"
    ["user_email"]=>
    string(19) "djl135e54@yahoo.com"
    ["user_url"]=>
    string(55) "http://bstoner.wpengine.com/forums/users/daveinbedstuy/"
    ["user_registered"]=>
    string(19) "2017-08-10 14:23:53"
    ["user_activation_key"]=>
    string(0) ""
    ["user_status"]=>
    string(1) "0"
    ["display_name"]=>
    string(13) "daveinbedstuy"
    ["spam"]=>
    string(1) "0"
    ["deleted"]=>
    string(1) "0"
  }
  ["ID"]=>
  int(3864)
  ["caps"]=>
  array(2) {
    ["subscriber"]=>
    bool(true)
    ["bbp_participant"]=>
    bool(true)
  }
  ["cap_key"]=>
  string(15) "wp_capabilities"
  ["roles"]=>
  array(2) {
    [0]=>
    string(10) "subscriber"
    [1]=>
    string(15) "bbp_participant"
  }
  ["allcaps"]=>
  array(4) {
    ["read"]=>
    bool(true)
    ["level_0"]=>
    bool(true)
    ["subscriber"]=>
    bool(true)
    ["bbp_participant"]=>
    bool(true)
  }
  ["filter"]=>
  NULL
  ["site_id":"WP_User":private]=>
  int(1)
}

Then what EJR says about TIC applies.

stickerhappy | 9 years and 4 months ago

string(1) "1"
object(WP_User)#5062 (8) {
  ["data"]=>
  object(stdClass)#5063 (12) {
    ["ID"]=>
    string(6) "100776"
    ["user_login"]=>
    string(12) "stickerhappy"
    ["user_pass"]=>
    string(34) "$P$B22w2UCKIlYWBOfDUi2mGifya.FPZ01"
    ["user_nicename"]=>
    string(12) "stickerhappy"
    ["user_email"]=>
    string(20) "andysclass@gmail.com"
    ["user_url"]=>
    string(22) "/forums/users/bknites/"
    ["user_registered"]=>
    string(19) "2017-08-10 14:32:57"
    ["user_activation_key"]=>
    string(0) ""
    ["user_status"]=>
    string(1) "0"
    ["display_name"]=>
    string(12) "stickerhappy"
    ["spam"]=>
    string(1) "0"
    ["deleted"]=>
    string(1) "0"
  }
  ["ID"]=>
  int(100776)
  ["caps"]=>
  array(2) {
    ["subscriber"]=>
    bool(true)
    ["bbp_participant"]=>
    bool(true)
  }
  ["cap_key"]=>
  string(15) "wp_capabilities"
  ["roles"]=>
  array(2) {
    [0]=>
    string(10) "subscriber"
    [1]=>
    string(15) "bbp_participant"
  }
  ["allcaps"]=>
  array(4) {
    ["read"]=>
    bool(true)
    ["level_0"]=>
    bool(true)
    ["subscriber"]=>
    bool(true)
    ["bbp_participant"]=>
    bool(true)
  }
  ["filter"]=>
  NULL
  ["site_id":"WP_User":private]=>
  int(1)
}

Found out title is listed as tenants in common, DIBS.

EJR | 9 years and 4 months ago

string(1) "1"
object(WP_User)#5061 (8) {
  ["data"]=>
  object(stdClass)#5065 (12) {
    ["ID"]=>
    string(5) "79362"
    ["user_login"]=>
    string(3) "EJR"
    ["user_pass"]=>
    string(34) "$P$B.h6vu7ImM77fV6j0TvRwlieo3mAr4/"
    ["user_nicename"]=>
    string(3) "ejr"
    ["user_email"]=>
    string(19) "ejrothman@gmail.com"
    ["user_url"]=>
    string(46) "http://bstoner.wpengine.com/forums/users/ejr2/"
    ["user_registered"]=>
    string(19) "2017-08-10 14:30:58"
    ["user_activation_key"]=>
    string(0) ""
    ["user_status"]=>
    string(1) "0"
    ["display_name"]=>
    string(3) "EJR"
    ["spam"]=>
    string(1) "0"
    ["deleted"]=>
    string(1) "0"
  }
  ["ID"]=>
  int(79362)
  ["caps"]=>
  array(2) {
    ["subscriber"]=>
    bool(true)
    ["bbp_participant"]=>
    bool(true)
  }
  ["cap_key"]=>
  string(15) "wp_capabilities"
  ["roles"]=>
  array(2) {
    [0]=>
    string(10) "subscriber"
    [1]=>
    string(15) "bbp_participant"
  }
  ["allcaps"]=>
  array(4) {
    ["read"]=>
    bool(true)
    ["level_0"]=>
    bool(true)
    ["subscriber"]=>
    bool(true)
    ["bbp_participant"]=>
    bool(true)
  }
  ["filter"]=>
  NULL
  ["site_id":"WP_User":private]=>
  int(1)
}

The default, absent any “magic words” is tenancy in common, which means you each own 50% of the property and when one person dies the 50% goes into that person’s estate as opposed to the other owner. If, as DiBS states, the deed specifically reads “Joint Tenancy With Right Of Survivorship”, then upon one person’s death, that person’s interest would go to the other person. There are advantages and disadvantages to each form of ownership. Which one is appropriate for you and your father requires a review of your specific circumstances and a discussion with a real estate attorney, accountant and/or financial advisor. The costs to change the deed should be minimal.

slopefarm | 9 years and 4 months ago

string(1) "1"
object(WP_User)#5063 (8) {
  ["data"]=>
  object(stdClass)#4896 (12) {
    ["ID"]=>
    string(3) "655"
    ["user_login"]=>
    string(9) "slopefarm"
    ["user_pass"]=>
    string(34) "$P$BK7dzbqXJe9TV6iU0glcNZiXdOt9CR1"
    ["user_nicename"]=>
    string(9) "slopefarm"
    ["user_email"]=>
    string(18) "jrubin@law.nyc.gov"
    ["user_url"]=>
    string(24) "/forums/users/slopefarm/"
    ["user_registered"]=>
    string(19) "2017-08-10 14:11:42"
    ["user_activation_key"]=>
    string(0) ""
    ["user_status"]=>
    string(1) "0"
    ["display_name"]=>
    string(9) "slopefarm"
    ["spam"]=>
    string(1) "0"
    ["deleted"]=>
    string(1) "0"
  }
  ["ID"]=>
  int(655)
  ["caps"]=>
  array(2) {
    ["subscriber"]=>
    bool(true)
    ["bbp_participant"]=>
    bool(true)
  }
  ["cap_key"]=>
  string(15) "wp_capabilities"
  ["roles"]=>
  array(2) {
    [0]=>
    string(10) "subscriber"
    [1]=>
    string(15) "bbp_participant"
  }
  ["allcaps"]=>
  array(4) {
    ["read"]=>
    bool(true)
    ["level_0"]=>
    bool(true)
    ["subscriber"]=>
    bool(true)
    ["bbp_participant"]=>
    bool(true)
  }
  ["filter"]=>
  NULL
  ["site_id":"WP_User":private]=>
  int(1)
}

Yes. I am not an RE lawyer, but I would think the form of ownership would be stated on the deed. If not, an RE attorney would know what the default rule if, say, the deed just has both of your names.

daveinbedstuy | 9 years and 4 months ago

string(1) "1"
object(WP_User)#5065 (8) {
  ["data"]=>
  object(stdClass)#5062 (12) {
    ["ID"]=>
    string(4) "3864"
    ["user_login"]=>
    string(13) "daveinbedstuy"
    ["user_pass"]=>
    string(34) "$P$BtJYyObAQmff2MQp.qFP7/kmwU1bBZ1"
    ["user_nicename"]=>
    string(13) "daveinbedstuy"
    ["user_email"]=>
    string(19) "djl135e54@yahoo.com"
    ["user_url"]=>
    string(55) "http://bstoner.wpengine.com/forums/users/daveinbedstuy/"
    ["user_registered"]=>
    string(19) "2017-08-10 14:23:53"
    ["user_activation_key"]=>
    string(0) ""
    ["user_status"]=>
    string(1) "0"
    ["display_name"]=>
    string(13) "daveinbedstuy"
    ["spam"]=>
    string(1) "0"
    ["deleted"]=>
    string(1) "0"
  }
  ["ID"]=>
  int(3864)
  ["caps"]=>
  array(2) {
    ["subscriber"]=>
    bool(true)
    ["bbp_participant"]=>
    bool(true)
  }
  ["cap_key"]=>
  string(15) "wp_capabilities"
  ["roles"]=>
  array(2) {
    [0]=>
    string(10) "subscriber"
    [1]=>
    string(15) "bbp_participant"
  }
  ["allcaps"]=>
  array(4) {
    ["read"]=>
    bool(true)
    ["level_0"]=>
    bool(true)
    ["subscriber"]=>
    bool(true)
    ["bbp_participant"]=>
    bool(true)
  }
  ["filter"]=>
  NULL
  ["site_id":"WP_User":private]=>
  int(1)
}

Could be on the deed either way.

stickerhappy | 9 years and 4 months ago

string(1) "1"
object(WP_User)#5061 (8) {
  ["data"]=>
  object(stdClass)#5066 (12) {
    ["ID"]=>
    string(6) "100776"
    ["user_login"]=>
    string(12) "stickerhappy"
    ["user_pass"]=>
    string(34) "$P$B22w2UCKIlYWBOfDUi2mGifya.FPZ01"
    ["user_nicename"]=>
    string(12) "stickerhappy"
    ["user_email"]=>
    string(20) "andysclass@gmail.com"
    ["user_url"]=>
    string(22) "/forums/users/bknites/"
    ["user_registered"]=>
    string(19) "2017-08-10 14:32:57"
    ["user_activation_key"]=>
    string(0) ""
    ["user_status"]=>
    string(1) "0"
    ["display_name"]=>
    string(12) "stickerhappy"
    ["spam"]=>
    string(1) "0"
    ["deleted"]=>
    string(1) "0"
  }
  ["ID"]=>
  int(100776)
  ["caps"]=>
  array(2) {
    ["subscriber"]=>
    bool(true)
    ["bbp_participant"]=>
    bool(true)
  }
  ["cap_key"]=>
  string(15) "wp_capabilities"
  ["roles"]=>
  array(2) {
    [0]=>
    string(10) "subscriber"
    [1]=>
    string(15) "bbp_participant"
  }
  ["allcaps"]=>
  array(4) {
    ["read"]=>
    bool(true)
    ["level_0"]=>
    bool(true)
    ["subscriber"]=>
    bool(true)
    ["bbp_participant"]=>
    bool(true)
  }
  ["filter"]=>
  NULL
  ["site_id":"WP_User":private]=>
  int(1)
}

Not sure DIBS. We didn’t have a formal agreement when we bought it- we just each paid a portion of it. What does that make it? Both our names are on the deed and all other documents listed as co-owners.

daveinbedstuy | 9 years and 4 months ago

string(1) "1"
object(WP_User)#5062 (8) {
  ["data"]=>
  object(stdClass)#5063 (12) {
    ["ID"]=>
    string(4) "3864"
    ["user_login"]=>
    string(13) "daveinbedstuy"
    ["user_pass"]=>
    string(34) "$P$BtJYyObAQmff2MQp.qFP7/kmwU1bBZ1"
    ["user_nicename"]=>
    string(13) "daveinbedstuy"
    ["user_email"]=>
    string(19) "djl135e54@yahoo.com"
    ["user_url"]=>
    string(55) "http://bstoner.wpengine.com/forums/users/daveinbedstuy/"
    ["user_registered"]=>
    string(19) "2017-08-10 14:23:53"
    ["user_activation_key"]=>
    string(0) ""
    ["user_status"]=>
    string(1) "0"
    ["display_name"]=>
    string(13) "daveinbedstuy"
    ["spam"]=>
    string(1) "0"
    ["deleted"]=>
    string(1) "0"
  }
  ["ID"]=>
  int(3864)
  ["caps"]=>
  array(2) {
    ["subscriber"]=>
    bool(true)
    ["bbp_participant"]=>
    bool(true)
  }
  ["cap_key"]=>
  string(15) "wp_capabilities"
  ["roles"]=>
  array(2) {
    [0]=>
    string(10) "subscriber"
    [1]=>
    string(15) "bbp_participant"
  }
  ["allcaps"]=>
  array(4) {
    ["read"]=>
    bool(true)
    ["level_0"]=>
    bool(true)
    ["subscriber"]=>
    bool(true)
    ["bbp_participant"]=>
    bool(true)
  }
  ["filter"]=>
  NULL
  ["site_id":"WP_User":private]=>
  int(1)
}

Is it Tenants In Common or Joint Tenancy With Right Of Survivorship? If the latter, just leave it.

resident2 | 9 years and 4 months ago

string(1) "1"
object(WP_User)#5066 (8) {
  ["data"]=>
  object(stdClass)#5065 (12) {
    ["ID"]=>
    string(6) "181002"
    ["user_login"]=>
    string(9) "resident2"
    ["user_pass"]=>
    string(34) "$P$BYKCrEpDU34.3RJghRPk8/Xp1XpCve/"
    ["user_nicename"]=>
    string(9) "resident2"
    ["user_email"]=>
    string(21) "Jamanda1255@Yahoo.com"
    ["user_url"]=>
    string(0) ""
    ["user_registered"]=>
    string(19) "2017-08-10 14:07:33"
    ["user_activation_key"]=>
    string(0) ""
    ["user_status"]=>
    string(1) "0"
    ["display_name"]=>
    string(9) "resident2"
    ["spam"]=>
    string(1) "0"
    ["deleted"]=>
    string(1) "0"
  }
  ["ID"]=>
  int(181002)
  ["caps"]=>
  array(1) {
    ["bbp_participant"]=>
    bool(true)
  }
  ["cap_key"]=>
  string(15) "wp_capabilities"
  ["roles"]=>
  array(1) {
    [0]=>
    string(15) "bbp_participant"
  }
  ["allcaps"]=>
  array(1) {
    ["bbp_participant"]=>
    bool(true)
  }
  ["filter"]=>
  NULL
  ["site_id":"WP_User":private]=>
  int(1)
}

The process itself is not that complicated, but it is best to discuss the tax implications and the best way to transfer without triggering capital gains tax now or estate taxes later, as well as making sure that any other family members cannot create problems later. A Real Estate lawyer with experience with Estates and elder law financial planning is who you need.