Transfer contract to my son?

[annster31]

My son has a 50 pt contract , I have 2 contracts 150 and 100, My wife and I want to give (transfer one contract) him one . Is that possible? Or do I have to sell it to him? Thank you for any advice

 

[Sandisw]

You can do a gratuitous transfer. There are ways to do it yourself or contact a title company.

LT transfers is supposed to be could and not that expensive, under $200.

DVC will recommend First American, which is whom I used last year, but it was pricey, close to $500.

https://www.disboards.com/threads/s...xisting-contract-gratuitous-transfer.3701707/

 

[drusba]

You can give one of the contracts to him. That requires a formal transfer of ownership including the preparation and filing of a new deed, payment of some costs for doing so, and getting DVD's formal waiver of right of first refusal (an automatic if it is a gift). DVC administration and accounting can provide some helpful info.

Critical is that you not sell it to him for any amount both because that gives rise to DVD's having the opportunity to actually exercise right of first refusal, and that "resale" results in your son being subject to all the current restrictions applicable to resale contracts, while doing it as a gift means your son gets all the same use rights that you already have.

 

[Disneypapa]

About five years ago, following the death of my spouse, I added my son as a JTWRS owner to my DVC. As mentioned above, there are a few things you will need to do, but generally it is an easy process.

 

[Lisann]

What are the tax ramifications, if any? Is it considered a taxable asset to the son?

 

[jbreen2010]

You can look into the IRS' policy on gifts. I believe there is an annual exclusion - I think it's about $15k a year from one individual to another without having to pay taxes on the gift. The IRS would look at the FMV of the property gifted.

https://www.irs.gov/businesses/smal...oyed/frequently-asked-questions-on-gift-taxes

 

[drusba]

What are the tax ramifications, if any? Is it considered a taxable asset to the son?

If you sell it to your son, the possible tax is to you as income tax in the form of a capital gain. That would not happen unless the sale price is greater than the addition of: (a) the price you originally paid for the contract, plus (b) certain transactional costs that can be added to that price when determining if there is a capital gain.

If it is a gift, then there will not be a tax unless both:

(a) it plus any other gifts given to your son during the calendar year exceeds the $15,000 annual per person gift exclusion.That $15,000 doubles if the contract being transferred is one owned by both you and your spouse. It doubles again if the transfer is to your son and his spouse, i.e., if both spouses are involved the total exclusion for the year is $60,000.

(b) Even if you exceed that annual gift exclusion, there is still no federal tax absent your being an extremely rich person who has given away many millions of dollars. Any gift amounts above the annual exclusion count only as deductions from your life-time gift exclusion which on the federal level is currently $11.58 million per person. So until the total amount of money above the annual exclusion that you give away during your life-time exceeds $11.58 million there is no federal gift tax. However, there are some states that have lower exemptions than the federal level and thus you need to check your applicable state although the exemption will still likely be a very high number.

Nevertheless, if the total gifts for the year exceed that annual exclusion -- the $15,000 per person (or more if spouses involved) -- you will have to file a gift tax return on the federal level and possibly also state level even if you are paying no tax. That return is needed to show how much of your life-time exclsion has been used up. You should hope to avoid filing that return. If you believe preparing an annual federal income tax return is difficult, then wait until you have to prepare a federal gift tax return. It has numerous pages with many terms (words) that you probably have never seen or heard of before, which are then explained in about 40-single space pages of completely incomprehensible instructions.