Early SS Withdrawal or Inherited home?

[Camas Lilly]

Meeting with brother this morning.

I did find the LLC on the web site. Tax payer is sister, owner is the LLC. Everything looks like it has been paid on time and is up to date.

[ivinsfan]

Quote:

Originally Posted by klucich Meeting with brother this morning. I did find the LLC on the web site. Tax payer is sister, owner is the LLC. Everything looks like it has been paid on time and is up to date.

That's good news for you if you did end up getting a lawyer the info you can give them the less money you will spend on fees.

[rothlev]

Quote:

Originally Posted by ivinsfan That's good news for you if you did end up getting a lawyer the info you can give them the less money you will spend on fees.

I would try to work on an amicable solution. Family is family. Give her the opportunity to buy you out. Or sell whichever she chooses.

Make sure she knows this is what you need to have happen. You need to pull your cash out. It sounds like she wants to hold the house for her son so let her have it, and take a fair offer. Only if she totally refuses to work with you would I use a lawyer.

[OldShooter]

Quote:

Originally Posted by rothlev ... Only if she totally refuses to work with you would I use a lawyer.

I agree but I think that has already happened. From the tone of the OP's comments, though, she will probably make at least one more try. Maybe she will get lucky.

[lhamo]

I would suggest getting an independent appraisal be part of whatever you do to wrap this mess up. I live in one of the less expensive parts of Seattle, and even teardowns here are going for 400k+. The only things that list for under 400k in Seattle these days are typically small condos in less-desirable areas (e.g. you have I5 or Aurora Avenue right next to you) or vacant lots that are pretty much unbuildable due to steep slope or wetlands on the property.

[rothlev]

Quote:

Originally Posted by Gumby I'm also wondering who gets tagged with depreciation recapture when the house is sold. I don't know the answer but maybe someone else here does.

I suspect that she is not declaring income or depreciation. She is "renting" to family at below market costs, or not renting at all, with her son occasionally pitching in to cover expenses. So it is simply a 2nd family home, not a rental at all. she is paying the expenses on it, so I do not see this as her getting some economic advantage. she may be losing money or breaking even at best. I would not go in with an adversarial affect. it won't help.

[rothlev]

A realtor should be able to determine fair market value, and then divide by two , subtract whatever money she put in the house for improvements, ( not upkeep) from your half and call it a day.

I would be inclined to give her the benefit of the doubt if you think she is exaggerating her improvements costs. just get it off your plate. It is not worth a family rift.

you asked her for a lot of information, but she may still not be clear as to what you exactly want.

[rothlev]

Quote:

Originally Posted by youbet While I would also suggest OP find a way to get out of any ownership position in this inherited house, expecting to get half of today's fair market value is not a reasonable expectation or a likely outcome IMHO. OP has owned half the house for a decade. Her sister has been managing the house. Her sister's son has been living there for the past five years with a questionable "rent" situation. (His sporadic payments might be hard to prove and a claim he's been a "house-sitter" and has been adding sweat equity to his mother's $50k remodeling investment could be made.) Bottom line: sister could reasonably claim she's been paying for remodeling and covering the other expenses for years with no/little offsetting income. Timeliness is a factor and lack of it may cost OP some money now. It's been ten years since she should have acted and since then has apparently been complacent in the situation. In her position, I'd ask for 50% of today's fair market value as an opener. But I'd be prepared to eventually accept a lower offer from sister if she comes forward with some justifications regarding expenses she's covered and the lack of income in recent years. Plus, of course, some fee for managing and being responsible for the property. If OP is willing to accept an offer from her sister for some amount less than a full 50% of today's fair market value, it solves a lot of issues. 1. OP gets some money. 2. OP is out of the complications involved in being a partial owner of a distant property complicated by family dynamics. 3. Sister is happy because she thinks she got a fair deal and, who knows, perhaps the family situation will evolve to something at least neutral and not an eternal seething hate situation. 4. The fate of the nephew is delivered to his mother with no involvement from his aunt (OP). 5. OP's tone suggests she is not out to vindictively hurt her sister or her son. Demanding a full 50% of today's fair market value without regard to the past decade of events might open a can of worms regarding taxes and other legalities far beyond OP's intentions. There are different ways OP could proceed. Ask for a full 50% of today's fair market value (as you suggest) and negotiate down. Or, perhaps, present a generous/kind situation by offering to sell at a discount to "help the family." For example: "I know my nephew is out of work due to COVID-19 issues. I'm in need of cash as I go into retirement. Could we solve both problems by transferring my half of the house to you for $X?" I'm unsure what $X might be. Perhaps 50% of fair market value at the time of the inheritance? Call the intervening decade a "break even?"

#1

[ivinsfan]

Quote:

Originally Posted by rothlev I suspect that she is not declaring income or depreciation. She is "renting" to family at below market costs, or not renting at all, with her son occasionally pitching in to cover expenses. So it is simply a 2nd family home, not a rental at all. she is paying the expenses on it, so I do not see this as her getting some economic advantage. she may be losing money or breaking even at best. I would not go in with an adversarial affect. it won't help.

I guess you missed the fact her son gets a cut rate place to live...BTW it's not adversarial to politicly ask for details about a house you co- own.

However it might be adversarial to answers such questions with the word..later.

[rothlev]

yes, her son got a cut rate place to live. Is that worth a family feud? It was a family member. She wasn't collecting rent and pocketing money. You could state a case that sister owes her "rental" income, I wouldn't go down that road. that is why the 3rd brother wants out of the whole thing. and she should too.

Life is not always fair in family. Her son may be more needy , fallen on hard times, whatever.


End the arrangement. ASAP. -- she does not need to help her nephew any further. Mother can do as she needs .

[ivinsfan]

Quote:

Originally Posted by rothlev I would try to work on an amicable solution. Family is family. Give her the opportunity to buy you out. Or sell whichever she chooses. Make sure she knows this is what you need to have happen. You need to pull your cash out. It sounds like she wants to hold the house for her son so let her have it, and take a fair offer. Only if she totally refuses to work with you would I use a lawyer.

potato... potato if someone refuses to give you basic info what are you to do? In fact the sister gains nothing by paying out the OP...she is defacto letting the son have the house without having to pay her sister out of pocket.

[ivinsfan]

Quote:

Originally Posted by rothlev yes, her son got a cut rate place to live. Is that worth a family feud? It was a family member. She wasn't collecting rent and pocketing money.

Why does it have to be a feud? Actually a third party might help prevent that...now the OP wants to retire, owns half of a pretty valuable home and would like to use that money...the 2 owners have different hopes and plans for what that home represents neither one is wrong or right.

The OP waited 10 years so I think they are pretty patient already.

I sure hope they can work out.

[rothlev]

"The OP waited 10 years so I think they are pretty patient already."

Absolutely , she should have spoken up sooner. water under the bridge, but now is when she decided she wanted out , in the mean time the home went up in value so she isn't hurt too badly by waiting.

"Why does it have to be a feud?"

when you get a lawyer involved it can get ugly. speaking from experience my family was broken up when my uncle who was the trustee refused to release my mother's share of an inheritance.

[Gumby]

In my view, you're not required to tolerate behavior from a family member that you wouldn't tolerate from a stranger. I'm aware that my view is not universal.

Quote:

Originally Posted by rothlev yes, her son got a cut rate place to live. Is that worth a family feud? It was a family member. She wasn't collecting rent and pocketing money. You could state a case that sister owes her "rental" income, I wouldn't go down that road. that is why the 3rd brother wants out of the whole thing. and she should too. Life is not always fair in family. Her son may be more needy , fallen on hard times, whatever. End the arrangement. ASAP. -- she does not need to help her nephew any further. Mother can do as she needs .

[rothlev]

Quote:

Originally Posted by ivinsfan I guess you missed the fact her son gets a cut rate place to live...BTW it's not adversarial to politicly ask for details about a house you co- own. However it might be adversarial to answers such questions with the word..later.

I think she was giving partial answers in order to NOT be adversarial, as she may not have had time to pull all that together and did not want to ignore the inquiry. OK - ? possible?

[pb4uski]

Quote:

Originally Posted by rothlev I suspect that she is not declaring income or depreciation. She is "renting" to family at below market costs, or not renting at all, with her son occasionally pitching in to cover expenses. So it is simply a 2nd family home, not a rental at all. she is paying the expenses on it, so I do not see this as her getting some economic advantage. she may be losing money or breaking even at best. I would not go in with an adversarial affect. it won't help.

I was thinking the same thing... it isn't a rental, just a second home owned by the LLC and the nephew uses it an sporatically pitches in towards the cost. With that view you might avoid depreciation recapture but still get LTCG treatment for any gains.

[Camas Lilly]

I would be inclined to give her the benefit of the doubt if you think she is exaggerating her improvements costs. just get it off your plate. It is not worth a family rift. You asked her for a lot of information, but she may still not be clear as to what you exactly want.

I think she was giving partial answers in order to NOT be adversarial, as she may not have had time to pull all that together and did not want to ignore the inquiry. OK - ? possible?
yes, her son got a cut rate place to live. Is that worth a family feud? It was a family member. She wasn't collecting rent and pocketing money. You could state a case that sister owes her "rental" income, I wouldn't go down that road. that is why the 3rd brother wants out of the whole thing. and she should too.


Just had meeting with SIL and Brother. While we all agree she should be more transparent about the LLC and we should have, at the very least on an annual basis, been apprised of our interests, we are going to give her the benefit of the doubt, for now.

She indicated she didn't have time right now, but remembering she is a CPA, we should know she really is very busy right now with tax deadlines looming and she has been known to have three jobs at the same time. This is not really out of character.

Secondly, we decided we should be more clear about what information we want to know, why we want to know it, ask some general questions about taxes and then ask when she thinks she could provide that information.

So yes, a couple of steps back, take a breather and try again. If that doesn't produce results we will go from there, but Brother seems to think there is no reason to panic, yet.

[pb4uski]

CPA here. It shouldn't take Sis much time at all to email to you copies of the LLC tax returns for 2018 and 2017.... I would also think that 2019 should be done or close to done. Or for that matter any relevant documents that she does have.... you're not asking her to prepare anything... just to relay existing information.

Though from what you described it seems possible that there are no tax returns.

[ivinsfan]

Now I'm confused. Does your brother actually have an ownership in this home?

If not why is he even involved at this point? I have a sister like this too. I have to think of six different way to phrase a simple question so I don't risk offending her or setting her off. If she brusque or unresponsive I'm supposed to wrack my brain and see if I said something wrong or am putting too much pressure on her.

You do understand that a grown woman could type the words.. I'm really busy with the extended tax season right now, can I get back to you after July 15?

She apparently has asked what YOU want to happen with this house...even after reading 4 pages here I can't figure out what you really want. I know for sure you are apprehensive about offending your sister, while you are waiting to recontact sister it might benefit you personally to put your wishes in writing to share with her at that time.

As I said you have my sympathy cause these patterns are lifelong and hard to break..deep down you probably know it won't be easy or pretty to make something happen but I wish you the best.

[youbet]

The amount of "drama" being added to this sad situation by my fellow posters is entertaining, to say the least!