Today, UrbanTurf is taking a look at the tax benefits associated with buying a home through a trust.
A trust is a legal arrangement in which a trustee holds property for the benefit of another person or entity. In the case of buying a home through a trust, the trust holds the title to the property, and the beneficiary is the person who lives in the home.
Below, we highlight a few of the tax benefits associated with buying a home through a trust.
Reduced Estate Taxes
One of the main advantages of buying a home through a trust is that it can help reduce estate taxes. Estate taxes are levied on the value of your estate when you pass away. If the estate is valued above a certain threshold, your heirs may be required to pay estate taxes. By placing your home in a trust, you can reduce the value of your estate, which can help minimize these taxes.
Income Tax Benefits
When you purchase a home through a trust, any income generated by the property is taxed at the beneficiary's tax rate, which is often lower than the tax rate for trusts. This means that you can save on taxes by taking advantage of the beneficiary's lower tax rate.
Additionally, if the home is used as a rental property, the expenses associated with the property can be deducted from the income generated by the property, which can help reduce the taxes owed.
Probate is the legal process of settling an estate after someone dies, and it can be a lengthy and costly one. By placing your home in a trust, you can avoid probate, which can help ensure that your beneficiaries receive their inheritance in a timely manner.
This article provides just a brief look at the tax benefits of buying a home through a trust. If you are considering setting up a trust, you should speak with a trusted estate planning attorney about how to move forward.
See other articles related to: buying a home through a trust
This article originally published at https://dc.urbanturf.com/articles/blog/a_look_at_the_tax_benefits_of_buying_a_home_through_a_trust/20787.
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