Legal Question in Real Estate Law in Illinois

have a condo that's paid off thinking of doing a TODI to my son. bought at 60, 000 worth 125,000. Will he have to pay any capital gains taxes on the difference? Live in Illinois

Asked on 2/01/20, 12:01 pm

4 Answers from Attorneys

Burton Padove Indiana and Illinois Lawyer, Burton A. Padove

Generally, the basis is taken as of the date of death. Any increase after that may be subject to capital gains. Since this is a general principle, I suggest that you discuss this with an accountant or estate planner to make sure how this transaction will apply specifically to your situation.

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Answered on 2/01/20, 12:40 pm
Michael Goldberg Johnston Tomei Lenczycki & Goldberg LLC

A transfer on death instrument is not a present gift. As Mr. Padove mentioned, upon your death when the property transfers, any increase from the date of death basis to the time he sells it may be subject to capital gains tax. A transfer on death instrument should be considered as part of a more comprehensive estate plan. If you have additional assets, you should also consider the Illinois estate tax and Federal estate tax. If you would like to discuss TODIs further, do not hesitate to reach out to me or any of the other fine estate planning attorneys listed on LawGuru. Best of luck!

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Answered on 2/01/20, 1:08 pm

I agree with Mssrs. Padove & Goldberg. See an estate planning/tax attorney at least for a consult and even if this is your primary asset. There may be other ways of transferring your fee interests while you're alive that take advantage of annual gift tax exclusions, but unless it is properly documented could result in your loss of control of conveyancing if that is of any concern.

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Answered on 2/02/20, 6:50 am
Henry Repay Law Offices of Henry Repay

The recipient should receive the same step up in basis that would apply if the property was inherited otherwise. I recommend a consult with an attorney to review your estate plan generally.

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Answered on 2/02/20, 7:08 am

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