Discussion Archives:Grandfather/grandson rental property, best way to handle?

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Discussion Forum Index --> Advanced Tax Questions --> Grandfather/grandson rental property, best way to handle?


Discussion Forum Index --> Tax Questions --> Grandfather/grandson rental property, best way to handle?

Scottycoyote (talk|edits) said:

4 April 2008
My client (grandfather) and grandson (new client) bought a rental property together, paid cash no mortgage. Both actually put up equal money for the property (71k ttl, residental rental house). Normally i would just do split schedule E's (or possibly get them to set up a partnership, although they just brought this to me).

So the kicker is the grandfather says the property is jointly titled (with right of survivorship) but sometime either this year or next he will be giving his half to his grandson (or not, whatever i recommend). So im trying to think ahead here and cover all the bases.

they will do whatever i recommend.......the grandson is in the lowest tax bracket(20 years old) while grandfather is usually at least in the 25% if not higher, hes 70 but no idea when he will retire. Grandfather will have an estate over 1 mil easy. Since they just bought the property the grandfathers gifted 1/2 versus the step up on inherited 1/2 later isnt a huge consideration i dont think.

what would you recommend? If he does gift it, other than filling out a 706 and having it come off his unified gift is there any other factors to consider? Just leave it as separate schedule Es? Can i put it all in grandsons name to begin with and just call the other 1/2 a loan (backed up with proper loan and maybe a loan forgiveness later?)

Seems like i remember an natp class that talked about family partnerships and being able to move assetts that way without much consequence.

i feel like this will be the only property they do this with.

suggestions or talking points?

Scottycoyote (talk|edits) said:

4 April 2008
lol i got to stop making these long posts, im starting to see they get looked at but not answered, and im guilty of it too.

anybody see any part of it they wanna address? anybodyyyyyyyyyy lol

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