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Grandparent to Grandchild Exclusion

Yesterday’s focus was the parent to child exemption for re-assessment in California property taxes. This is a booming area of law as Counties are desperate for tax revenue and finding people who do not do all their tax forms right can be an easy way to make more money. The key with property taxes is it happens every year!  Thus it’s important to know your rights and make sure you file the right forms with the county assessor in the county where the property resides. The parent to child exclusion applies to transfers from a parent to child.  The grandparent to grandchild exclusion is similar but applies to a transfer (at death or during life) from a grandparent to a grandchild WHERE THE GRANDCHILD’S PARENT IS DECEASED.  It’s very much like the IRS rule relating to the generation
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Parent to Child Exemption Form

Upon death or any other transfer of real estate in California you need to evaluate if a PT-58 form is required. It is the document which tells the county assessor that a transfer has been made, of real property, between a parent and a child.  This will preserve the parent’s property tax assessment or basis.  This is also known as the “prop 13 basis.”  Likewise if a transfer is between a grandparent and a grandchild a similar exclusion is available in some cases.  This should be done within 3 years of the transfer and always done BEFORE any sale or transfer to an outsider. This is imperative!  Failure to file this with the county assessor in the appropriate county will create unnecessary property taxes now and into the future. The rules allow the transfer of the personal resi
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Prop 13 and Property Taxes

Most Californians known about the famous “Prop 13.”  Just google “Prop 13″ without specifying California and it will come up very high in your search I am sure! It’s the 1978 statewide proposition that established California’s modern day property tax system.  It set a ceiling on property tax based on your assessed value in 1975 (a 1% tax on that value) and allowed for increases of up to 2% a year. Of course value increased a lot more than 2% a year in many years since 1975!  Thus there are people with multi-million dollar homes paying $800 a year in tax. The biggest problem comes up when a person dies and their child (or grandchild) wants to continue living in that multi-million dollar home but can’t even afford the property tax if they were paying what their neighbors we
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