Mobile home transfer/gift tax to family member in San Jose, CA?

4 Replies

Hello BP members,

My parents live in a mobile home in San Jose, CA. It is owned free and clear under my sister's name; however, she would like to transfer the title to me.  There is no exchange in money involved as we consider the mobile home belongs to our parents.  Is there a transfer or gift tax?  I searched on CA Department of Housing but didn't see any fee/tax involved in the transferring title between family (http://www.hcd.ca.gov/manufactured-mobile-home/registration-titling/buy-sell-transfer.shtml). This sounds too good to be true.  

Thanks in advance.

Hau

What you are describing does not necessarily fall under housing laws, but gift tax laws. If the gift is less than $14,000 of value, then there should be no FEDERAL gift tax due. For 2017, an individual can give another individual gifts up to $14,000 of value and not owe gift taxes. If your sister is married, she and her spouse can give you up to $28,000 worth of gifts. Money cannot  change hands to be considered a gift. I do not know about California gift and transfer tax laws.  You should consult with a CPA in your state for a definitive answer regarding CA transfer and gift taxes. Here is a link to the IRS website regarding federal gift taxes: https://www.irs.gov/businesses/small-businesses-se...

I hope that helps!

@Hau N.

In addition to gift tax consequences you may want to consider property tax consequences if the transfer will cause reassessment. You’ll want to find a CPA familiar with those rules as well.

thanks @Janene Tompkins and @Katie Lepore . I did a bit of research last night about this. it is consistent with what Janene had stated. My married sister would need to report it as the mobile value is more than $28k, but she doesn't have to pay gift tax on it as her lifetime limit is more than $5 millions.

@Hau N.

Have you gone through the process of acquiring the property? If so, which path did you take; if you don't mind sharing. 

I am in a similar situation where my brother owns a mobile home and he wishes to sell to me at a lower than market value. I am searching online before speaking to a CPA to find the appropriate course of action that would minimize the tax dues since we don't have a lot of money. Any wisdom I can learn from fellow BP members would be valuable in the meantime. Since the value the property is under 250K, instead of selling at a lower price and be subjected to a gift tax, I am planning to purchase the property at market value. Being under the 250K price tag, there would be no capital gain tax as my brother lived in the property for 2 years within the last 5 years. Is this the right path to take? If anyone had gone through similar situation can advise, it would be awesome. 

Thanks!

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