I bought a house in SD that I rent to my son as he kept getting priced out of rentals. He is a single Dad with 3 kids. This was before my husband and I moved to TN for his work. I am retired with just SS. The rental income from the house covers the mortgage, insurance, taxes and improvements as it was in disrepair. I show a small loss each year after depreciation. My husband makes about $100,000. and is not on the deed of the house.
The goal is to transfer the house to my son. I purchased it for about $90,000 4-5 years ago. The current mortgage is about $56,000 @ 3.2%. The current value is about $175,000 as it still needs work. My will shows he gets the house and there is a life insurance that would pay off the mortgage. But we would like to transfer it sooner if we can find a way that doesn't hurt us on taxes.
Should I put the just the house in a Trust in SD with my son as the beneficiary? Sell it to him CFD at what he's currently paying for rent? I can't assign the mortgage. I/m concerned about how gift taxes, capital gains taxes, etc would affect both his taxes and me and my husbands taxes.
What would you advise? Our CPA in SD retired and I was quoted about $450 to meet with his replacement to discuss this. We file through TurboTax now. Thanks for your guidance!
