What are the advantages and disadvantages of qualified personal stay confidence?
qualified personal residence confidence is a specific type of agreement used to transfer the property to minimize gifts and avoid real estate tax. It differs from standard confidence in the residence to offer greater flexibility in the sale of real estate. The main disadvantage is that the conditions for qualifications for this condition are stricter. The use of qualified personal stay confidence can also mean that the owner is unable to take a second mortgage. When a person dies, the property will not be considered part of his property. This means that the heirs will not repay any real estate tax on the property. It is a form of credibility of split interest interest, which does not concern interest in the same way as the loan, but rather the legal interest of assets. The divided interest means that for a specified period, known as this term owner retains the right to live in property without paying rent. At the end of the period, the remaining recipients or recipients will be fully controlled. This means that the soilThe water owner cannot refinance with the property as a collateral.
as well as removal of real estate tax will also be assessed tax on personal residence at a lower level of donation tax. Gift tax is not assessed from the full value of the property. Instead, it is assessed according to the value of the donation to recipients, which is calculated according to the specified formula, which contains a discount on taking into account the period that the recipient must wait for the full ownership to be accepted.
In order for this form of trust to remain exempt from a full tax tax, certain conditions must be met. There are three key conditions for standard personal residence. First, trust must hold only one property, and it must be the home of the original owner. Secondly, the property cannot be sold during a period of trust. Finally, as soon as this period is over, the property cannot be sold to the original owner or husband of the original owner.
Qualified Personal ResideNCE Trust removes the limitation of real estate sales during a period of credibility. In return, confidence must meet other conditions, such as that if the property is sold, some income must each year for the rest of the term of office, while no money can go until it is functional before it is completed. The main disadvantage of qualified confidence of personal stay is that if the original owner dies during the credibility period, the property passes to the recipients, but the real estate tax becomes full value.