1/16    There was talk about prop 13 and how the property tax is based on
        the selling price of the home.  Is the following legal?  I have a
        1 million dollar house I want to pass on to my kids, I sell it to
        them for $100 bucks or some other artificially low number.  Their
        property tax would then based on this $100 transaction.  Would this
        also be a way around inheritance taxes?  If I sell all my property
        to my kids at below market value?
        \_ http://www.irs.gov has all your answers.
        \_ of course it's not legal.  don't be a moron.  -tom
           \_ Hey tom, Tolkien named a troll after you.
           \_ and so the logical question is, who determines how low a price
              one can sell?  Houses sell for below appraised price all the
              time.  Is there a law saying that one cannot sell $X amt below
              appraised price if it's to a family member?  I can see loop
              holes if I use a third party.  I sell to a friend for below
              market value.  He then sells to my kid for an even lower amt.
              So on and so forth.
                \_ it doesn't matter how much you sell it for, it matters how
                   much the house is appraised for
                   \_ Exactly right. The city/county assessor does this task.
                      In CA, when the property changes ownership, it gets
                      reassessed.
                \_ the difference between appraised value and sale value in
                   these case is treated as a gift and subject to the gift
                   tax.  i think this would imply that you (and your spouse)
                   can sell the house for $10k/20k under market to your
                   children.
                   \_ You can give even more than that, but it counts against
                      your estate tax limit later.
                      \_ only if you subtract from your Unified Credit limit.
              \_ Appraisers (at least in CA) are licensed and certified.
                 And are liable if their appraisal of a home turns out to
                 be way out of line with the "true" market value.
        \_ Would this work?  You add your kids' names to the house, so you and
           your kids are co-owners.  Then some years later before you die, you
           remove your name, so only your kids alone are the co-owners.  Would
           this avoid re-assessment in CA?