[WSBARP] real estate - tax issues
Kary Krismer
Krismer at comcast.net
Fri Jan 15 10:20:38 PST 2021
The step up in basis makes little sense with the increased unified
credit. Before there was much more of a chance of double taxation.
Maybe even less sense in the context of a spouse receiving property.
Kary L. Krismer
206 723-2148
On 1/15/2021 9:46 AM, Rani K. Sampson wrote:
>
> According to a local CPA who just gave a tax update talk, his firm
> expects the step-up in basis to be on the chopping block. 1031s are
> also a target.
>
> That’s part of the fun of working in estate-planning. The laws are
> always changing.
>
> *Rani K. Sampson*
>
> Overcast Law Offices |Attorney
>
> 23 S Wenatchee Ave #320, Wenatchee WA 98801 |(509) 663-5588 x 6
>
> *From:* wsbarp-bounces at lists.wsbarppt.com
> <wsbarp-bounces at lists.wsbarppt.com> *On Behalf Of *John J. Sullivan, Esq.
> *Sent:* Friday, January 15, 2021 9:16 AM
> *To:* 'WSBA Real Property Listserv' <wsbarp at lists.wsbarppt.com>
> *Subject:* Re: [WSBARP] Taking non resident alien spouse off title of
> real estate - tax issues
>
> Yes. If it is converted from CP to SP as TIC, only the decedent’s half
> would receive the first step up. But the SS still gets the $250K
> residence exemption for SS’s half, and the entire property would get
> the step up at the second death. It may not be a major concern.
>
> John J. Sullivan
>
> *From:* wsbarp-bounces at lists.wsbarppt.com
> <wsbarp-bounces at lists.wsbarppt.com> *On Behalf Of *Kary Krismer
> *Sent:* Friday, January 15, 2021 8:40 AM
> *To:* wsbarp at lists.wsbarppt.com
> *Subject:* Re: [WSBARP] Taking non resident alien spouse off title of
> real estate - tax issues
>
> I've been thinking about my step up in basis concern, and I no longer
> think it's a concern. If the other spouse gets the property the basis
> would be stepped up because they would inherit the entire property.
> If anyone else gets the property, the basis would be stepped up for
> the same reason. I think the concern would be converting the property
> from community property to tenants in common. There my concern would
> be only half the property would get a step up in basis.
>
> But of course, checking with a tax attorney would be prudent. There
> may be other estate or income tax concerns.
>
> Kary L. Krismer
> 206 723-2148
>
> On 1/12/2021 9:42 PM, Kary Krismer wrote:
>
> What I meant by raising FIRPTA was whether the couple was
> contemplating a future sale and thinking by doing a QCD beforehand
> they could avoid FIRPTA. I'm not sure that future sale would give
> rise to FIRPTA withholding, but again I'm not sure it wouldn't
> either. But I wasn't worried about FIRPTA on the gift.
>
> As to the step up in basis my concern was that the step up would
> only apply to community property, not separate property. Also a
> question I don't know the answer to. In the back of my mind I
> seem to recall it applies to either type of property, but that's
> something I'd want to make sure of.
>
> Kary L. Krismer
>
> 206 723-2148
>
> On 1/12/2021 7:29 PM, John J. Sullivan wrote:
>
> Good points.
>
> 1. No FIRPTA withholding on gifts. No gain realized.
>
> https://www.irs.gov/individuals/international-taxpayers/exceptions-from-firpta-withholding
> <https://www.irs.gov/individuals/international-taxpayers/exceptions-from-firpta-withholding>
>
> 2. Yes. If NRA spouse died first there would be a step up in
> basis even though estate not subject to estate tax. Perhaps
> she transfers her interest to a revocable trust for his
> benefit? Or somehow achieve whatever the objective is while
> not removing it from her gross estate?
>
> https://hodgen.com/why-nonresident-decedents-get-step-up-basis-at-death/
> <https://hodgen.com/why-nonresident-decedents-get-step-up-basis-at-death/>
>
> Don’t forget to check any applicable treaty.
>
> John J. Sullivan
>
> Sent from my iPhone
>
> On Jan 12, 2021, at 7:15 PM, Kary Krismer
> <Krismer at comcast.net> <mailto:Krismer at comcast.net> wrote:
>
>
>
> I would take a step back, and if this is just about
> FIRPTA, find out if FIRPTA would even apply with a US
> Citizen still on title. I sort of doubt it would since
> they would have a taxpayer to reach, but I don't know that.
>
> And then I would think about the step up in basis on death
> of community property when a spouse passes away, and find
> out whether you'd be giving that away. Without this
> transfer and a step up in basis there'd likely be little
> or no gain for several years, and even if FIRPTA applied
> any money taken would be paid back upon filing a return.
> Note that step up in basis would apply whichever spouse
> dies first.
>
> It may be the client is wishing to avoid a non-existent
> problem and creating a future liability.
>
> Kary L. Krismer
>
> 206 723-2148
>
> On 1/12/2021 6:22 PM, John J. Sullivan wrote:
>
> If NRA wife gifts now to citizen husband, the
> unlimited marital deduction applies.
>
> I would specify it’s to create separate property and
> claim that REET exemption so if she dies her estate
> has no CP interest in US source property.
>
> John J. Sullivan
>
> Sent from my iPhone
>
> On Jan 12, 2021, at 3:42 PM, Lisa Chiang
> <feesimple7 at gmail.com>
> <mailto:feesimple7 at gmail.com> wrote:
>
>
>
> Hi all,
>
> A silly question, as it's been awhile since I've
> dealt with this scenario, so want to be sure:
>
> Client is U.S. citizen. Wife used to hold a green
> card, which she gave up after they moved overseas
> a decade ago. IRS deems her to be a non resident
> alien (NRA) for tax purposes. Kids are also U.S.
> citizens (all minors currently).
>
> Real estate in WA state acquired as community
> property when they both lived and worked here.
>
> Client would like to take his wife off title of WA
> house (she's agreeable).
>
> *Wondering about gift tax issues before we
> proceed. (Will prepare QDOT for other liquid
> assets). Any thoughts or wisdom from the group is
> greatly appreciated.*
>
> Kind regards,
>
> Lisa
>
>
>
> --
>
> /Estate planning and settlement, trusts, real
> estate and //probate/
>
> 206.569.8838*
>
> *
>
> This electronic mail transmission and any
> accompanying documents contain information
> belonging to the sender which may be confidential
> and legally privileged. This information is
> intended only for the use of the individual or
> entity to whom this electronic mail transmission
> was sent as indicated above. If you are not the
> intended recipient, any disclosure, copying,
> distribution, or action taken in reliance on the
> contents of the information contained in this
> transmission is strictly prohibited. If you have
> received this transmission in error, please delete
> the message. Thank you.
>
> **
>
> *Circular 230 Disclaimer*. Any U.S. federal tax
> advice contained in this communication (including
> any attachments) is not intended or written to be
> used, and may not be used, for the purpose of (i)
> avoiding penalties under the Internal Revenue Code
> or (ii) promoting, marketing or recommending to
> another party any transaction or matter addressed
> herein.
>
> ***Disclaimer: Please note that RPPT listserv
> participation is not restricted to practicing
> attorneys and may include non-practicing
> attorneys, law students, professionals working in
> related fields, and others.***
>
> _______________________________________________
> WSBARP mailing list
> WSBARP at lists.wsbarppt.com
> <mailto:WSBARP at lists.wsbarppt.com>
> http://mailman.fsr.com/mailman/listinfo/wsbarp
> <http://mailman.fsr.com/mailman/listinfo/wsbarp>
>
> ***Disclaimer: Please note that RPPT listserv participation is not restricted to practicing attorneys and may include non-practicing attorneys, law students, professionals working in related fields, and others.***
>
> _______________________________________________
>
> WSBARP mailing list
>
> WSBARP at lists.wsbarppt.com <mailto:WSBARP at lists.wsbarppt.com>
>
> http://mailman.fsr.com/mailman/listinfo/wsbarp <http://mailman.fsr.com/mailman/listinfo/wsbarp>
>
> ------------------------------------------------------------------------
>
> Image removed by sender. Avast logo
> <https://www.avast.com/antivirus>
>
>
>
> This email has been checked for viruses by Avast antivirus
> software.
> www.avast.com <https://www.avast.com/antivirus>
>
> ***Disclaimer: Please note that RPPT listserv
> participation is not restricted to practicing attorneys
> and may include non-practicing attorneys, law students,
> professionals working in related fields, and others.***
>
> _______________________________________________
> WSBARP mailing list
> WSBARP at lists.wsbarppt.com <mailto:WSBARP at lists.wsbarppt.com>
> http://mailman.fsr.com/mailman/listinfo/wsbarp
> <http://mailman.fsr.com/mailman/listinfo/wsbarp>
>
> ***Disclaimer: Please note that RPPT listserv participation is not restricted to practicing attorneys and may include non-practicing attorneys, law students, professionals working in related fields, and others.***
>
> _______________________________________________
>
> WSBARP mailing list
>
> WSBARP at lists.wsbarppt.com <mailto:WSBARP at lists.wsbarppt.com>
>
> http://mailman.fsr.com/mailman/listinfo/wsbarp <http://mailman.fsr.com/mailman/listinfo/wsbarp>
>
> ***Disclaimer: Please note that RPPT listserv participation is not restricted to practicing attorneys and may include non-practicing attorneys, law students, professionals working in related fields, and others.***
>
> _______________________________________________
>
> WSBARP mailing list
>
> WSBARP at lists.wsbarppt.com <mailto:WSBARP at lists.wsbarppt.com>
>
> http://mailman.fsr.com/mailman/listinfo/wsbarp <http://mailman.fsr.com/mailman/listinfo/wsbarp>
>
>
> ***Disclaimer: Please note that RPPT listserv participation is not restricted to practicing attorneys and may include non-practicing attorneys, law students, professionals working in related fields, and others.***
>
> _______________________________________________
> WSBARP mailing list
> WSBARP at lists.wsbarppt.com
> http://mailman.fsr.com/mailman/listinfo/wsbarp
--
This email has been checked for viruses by Avast antivirus software.
https://www.avast.com/antivirus
-------------- next part --------------
An HTML attachment was scrubbed...
URL: <http://mailman.fsr.com/pipermail/wsbarp/attachments/20210115/82cc214f/attachment.html>
-------------- next part --------------
A non-text attachment was scrubbed...
Name: image002.jpg
Type: image/jpeg
Size: 377 bytes
Desc: not available
URL: <http://mailman.fsr.com/pipermail/wsbarp/attachments/20210115/82cc214f/image002.jpg>
More information about the WSBARP
mailing list