tommieeddie51
Dec 27, 2008, 04:31 PM
We were given some duplexes that had to be moved to make way for some commercial development. We had the lots to put them on so we took them. We asked our young and newly married sons to help with the moving and repairs and told them we would "sell" them each a building. We remodeled them into houses and they now each live in one. For the past few years we have been charging them rent at a price below what we have in them. They were neither able to get a loan at that time, and could not now. We rolled some debt into the mortgage when we financed them, so we felt responsible for some of the cost. My question is this. The loans are due to be paid off in 12 years. At the end of that 12 years it doesn't seem right to just sign them over to them. Wouldn't they have to pay some kind of income or gift tax? Should we draw up a contract for deed now using the balance of the loan, the total of their payments for the next 12 years, and use that to convey ownership when the mortgages are paid off. We have been claiming the insurance, taxes, etc. as a rental property. Everything is still in our names. What I really need is some advice on how to handle this and be legal. Thanks in advance for your help.