Question about how assets are identified for FA

Paying for College
1

<p>My husband co-signed on a loan in order for my brother to qualify to buy a house. The bank insisted that my husband’s name be put on the title. My brother came up with (quite a big) down payment (about $100K) and pays for all expenses/mortgage/etc. for the house. We have nothing to do with the house (except helping him qualify for the loan). Would we have to list this house as an asset and report the mortgage payment for FA purposes?</p>

<p>PS It’s ridiculous how many hoops one has to jump through to qualify for a loan nowadays and how strict the banks are :-(</p>

2

<p>No, you do not have to list this as an asset.</p>

3

<p>You would probably need to have the brother quit claim the house to take your DHs name off of it. It is technically an asset. As long as he cosigned, why would a bank care if he was an owner, it gives them no more power to recover if the loan is in trouble.</p>

4

<p>If dh quit claims his “portion” (even though he didn’t put in a single dime), would he need to pay gift tax or would it come out of his lifetime gift-tax exemption?</p>

<p>Isn’t there some where that we could explain all this for FA?</p>

<p>The bank insisted at closing - we didn’t even know about it till then. I guess they thought dh would be more “obligated” to fulfill the loan if his name was on the title.</p>

5

<p>^^Check your local legal regulations regarding home deeds/titles. When my H and I married we did the paperwork to title over his house and my house to each other so that both names were on both houses deeds for about $1.50 plus some filing costs. It’s probably more in today’s dollars but I think the register of deeds office or whatever governing body covers your particular municipality can tell you what forms to fill out and what the associated costs are to remove someone from the title. You could probably call a title office, but I’m guessing they would charge you more than if you can find out how to legally do it yourself.</p>

6

<p>The quit claim is not the problem. It’s the gift tax that the quit claim triggers since dh is in essence giving my brother “his half” of the equity in the house.</p>

<p>I don’t think that there’s a gift tax incurred between spouses (since you’re from the same household) but everyone else … I guess I should call IRS</p>