John Fraker: (00:05)
Hey, everyone. This is John Fraker with Keller Williams Bay Area Estates. In our last video, we talked about Proposition 60 and 90, which allows certain homeowners to transfer their property in basis to another property once they sell their house. Today we’re gonna talk about an equally important propositions and that is Propositions 58 and Propositions 193. These are respectively the parent-child transfer exclusions and the parent-grandchild transfer exclusions. So what does this mean?
John Fraker: (00:33)
Well, Prop 58 allows a parent to transfer their property to their children and also maintain their very low Prop 13 basis. Now this could happen in a couple of different situations. They can gift it or transfer to the child while they’re alive, or it can be transferred to them through their trust or through their estate after they passed away. In both circumstances, the children may be eligible for the Prop 58 transfer exclusion, which allows them to keep their parents low Prop 13 basis.
John Fraker: (01:00)
Prop 193 does the same thing for grandparent-grandchild transfers. The one key difference is that if the middle generation the child has not died, then the Prop 193 grandparent-grandchild exemption doesn’t work.
John Fraker: (01:14)
Now we had a client that had this happened to them once. They transferred their property to their child and their grandchild one-third, one-third, one-third. The problem is they got reassessed for thetch, for the portion that went to the grandchild because their parent was still alive. And they only found that out after the fact that their only way you can do the grandparent-grandchild exemption is that the middle generation, your child has passed away.
John Fraker: (01:39)
If you want more information on this, please go to our blog site and we’ll have a link to the Board of Equalization’s excellent website, which answers a ton of questions on Propositions 58 and 193. Thanks so much.