Q: Let’s say I have issues with the IRS that I am currently settling. And let’s say my father buys a home with my cash that I have on hand. Can my father quit claim the property to me after I have a resolution with the IRS? And, more importantly, can he do the paperwork in advance so that if he died before total resolution, I could then claim my property from his estate?
A: I don’t know what sort of issues you’re facing with the IRS, but I sure hope you have a lawyer and perhaps an enrolled agent (licensed to represent taxpayers before the IRS) helping you out.
What you’re proposing sounds a lot like trying to hide assets from the IRS so that you won’t have to pay them out to settle your IRS issues. I can’t advise you on that count, but will tell you that if the IRS suspects you of hiding assets, or not being honest with them about what you have, they can reverse any sort of transaction like the one you’re hoping to accomplish with your father and you could face criminal penalties as well.
Now, let’s say that your father is using his own money to buy a property and plans to leave you that property after he dies. Your father might want to think about establishing a revocable or irrevocable trust that names you the beneficiary. The property he buys would go into the trust, and when he dies, you would own the property.
Please consult an estate attorney for more details on this and possibly other options that would be available to you.
April 24, 2009