<p>We own the home we live in so I know that won't affect our EFC; however, I just realized that about 8 years ago, my mom asked if she could add me to the title of her house because she was afraid my dad would end up in a nursing home and a lawyer suggested my name be added. So, the title of her house is on her name, my dad's name, my name and my brother's name. Will I need to list this as property I own when I complete the fafsa?</p>
<p>Unfortunately, yes. It will actually be a financial advantage later as you will not have to pay inheritance tax when you inherit it, but it’s a negative for financial aid. Also, your primary home will not count for FAFSA only schools, but it will for most private colleges that use Profile.</p>
<p>If it is the primary family home then it is not reported on FAFSA so will have no impact on your FAFSA EFC. </p>
<p>Schools that require CSS or their own FA forms will all treat it differently, depending on their own policies.</p>
<p>Couldn’t your mom have found another way. I wonder if she was thinking about your FAFSA back then. But I think parent’s don’t always think that far in to the future</p>
<p>
It’s actually a bad idea financially. Chances are there will be no inheritance tax, but when they go to sell, because it was gifted to them previously, they will pay capital gains tax when they sell it. Had they inherited, they would have gotten a stepped up basis, and therefore, no capital gains.</p>
<p>Not sure what you mean by no inheritance tax. This administration is clearly in favor of one. It can be an excellent strategy to transfer property into your children’s names as permitted, much though does depend on the details of the estate.</p>
<p>Sounds more like they were trying to avoid it all going to a nursing home. I kind somewhat sympathize. My in-laws were wiped out by their nursing home costs.</p>
<p>This administration is clearly in favor of one.</p>
<p>Ha! This “administration” would never get the inheritance tax level lowered thru the house now. This admin is lame duck.</p>
<p>Unless this house is worth a whole bunch, her eventual house inheritance will come under the limits.</p>
<p>So…you currently own a quarter of the house’s value minus any mortgage? How much is the house worth minus any mortgage if it had to be immediately sold?</p>
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You are talking about an estate tax, not an inheritance tax. There is a big difference, although many people use the terms somewhat interchangeably. The estate tax is paid by the deceased person’s estate before any property is distributed; an inheritance tax is paid by the person who inherits the property. At the Federal tax level, there is no inheritance tax. Up until this year there was an estate tax.</p>
<p>For 2010, there is no estate tax either, however you lose the step-up in basis that was available when there was an estate tax. Whether this is better or worse for you depends on your situation, and it is somewhat complicated. For most people, the exclusion was large enough to cover the entire estate, and having a stepped up basis is better than no estate tax. If you inheriting the Yankees, you are very happy there is no estate tax.</p>
<p>Without action by Congress, the estate tax comes back on 1/1/2011 with a $1 million exclusion and up to 55% tax (IIRC) on the excess (same as it was in 2001). The last serious proposal I heard was an estate tax with a $3.5 million exclusion and up to a 45% rate. Will it happen? Who knows.</p>
<p>Only a few states have inheritance taxes: Connecticut, Indiana, Iowa, Kansas, Kentucky, Maryland, Nebraska, New Jersey, Oregon, Pennsylvania and Tennessee. Many states have an estate tax as well.</p>
<p>Putting your name on the title of your parents’ house may not be an effective means of removing the asset from your parents for Medicaid purposes, and may have triggered other tax issues. This area is pretty complicated and really needs an estate planning specialist to make sure everything is set up right.</p>
<p>Note, I am not an expert in these areas.</p>
<p>I remember this coming up at a seminar that grandparents putting assets into kids or grandkids names was a no-no. There may be another way to accomplish whatever the original goal was, but you need to consult with an estate planner.</p>