My grandmother just signed the deed to her home over to me. The home is paid for. No taxes are owed on the home. The home, however, is in need of a lot of work. I do not know where to begin to look for funds. I live in NC and was wondering if there are programs to assist with these kind of things or should I just sell and cut my loses. I have always felt that you shouldn't get rid of real estate, but I was wondering if anyone had any advice.
Does anyone live in the home?
Is it habitable?
Is it near you?
There are always taxes, unless it is a church. When you file your deed there will be taxes and fees.
Is it rural, urban?
If you are now the owner, I would do a title search to make sure that there are no liens that you do not know about.
Can you fix it yourself?
There may also tax implications for both you and your grandmother for this transfer. One person can given another up to $14,000 without any tax implications. If there property is worth more than $14K as is, there are. Discuss this with a CPA.
In addition, the "basis" for you for this property is the same as her basis because it was given to you while she was alive. Had it passed on death, your basis would have been the fair market value on the date of her passing. But when a property is transferred while the grantor (giver) is alive, you get their basis. So, you need to find paperwork and figure that out. That should include any improvements made while she owned the property. When you do sell this will have an effect on the taxes.
Lots of ways to get money to fix up a house. What's your plan for the house once fixed up? Live in it? Sell it? Some options, like hard money, only work if you're not living there.
- Loan - hard money, credit cards, personal loan, 401k loan, store cards
- sell something
- get a second job
- live there and do the work slowly as you have money.
As @Jon Holdman states, there could be huge gift tax and cap gain tax consequences doing this. You just received a large gift at grandma's cost-basis from when she bought the house in 1958 or whatever. Seek tax/legal advice and re-do it properly. Hopefully you haven't yet recorded the deed at the county courthouse. Gift taxes are like 55% if you don't follow the rules! That said, don't receive the deed while g-ma is alive. Protect yourself through her will and maybe a proper exclusive option to purchase that renews or something. If you receive the deed after grandma passes, your cost-basis will be current market value at that time.
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