Received commercial property from inheritance. Would like to give ownership to my child. Is there anything I should consider?
This is my first time owning a commercial property and can't handle it thus would like to give it to my child. Would appreciate advice on this process. We are located in Texas.
[{"id": "im2oebb", "text": "Take care of the property and when they become 18 pass it to them. If it's an operable building and vacant then get it rented so that it provides income. Put the property in a trust which will make passing ownership easy.", "replies": [{"id": "im32ncn", "text": "Sorry forgot to include age of my child. I should have said adult as they are 29.", "replies": [], "depth": 2}], "depth": 1}, {"id": "im2sht7", "text": "Child as in 18, or 40?  Depends entirely on the building. Last thing you want to do is give your child an albatross around their neck. If gift tax comes into play, update the daylights, take bonus depreciation, make the financials look bad, get a fancy appraisal firm to do their thing and set them up for success. If they\u2019re young, put it in an LLC, you keep 1 percent (the SOLE voting share), then put the other shares in a trust.", "replies": [{"id": "im32h68", "text": "Thank for thr advice. Sorry should have said adult as she is 29.", "replies": [], "depth": 2}], "depth": 1}, {"id": "im2vfsh", "text": "If neither of you are familiar running commercial property, I highly recommend you get a professional manager who's experienced in commercial management.", "replies": [{"id": "im32juy", "text": "Thanks currently is in a lease but will look into this.", "replies": [], "depth": 2}], "depth": 1}, {"id": "im30io8", "text": "You could also sell the property and do a 1031 exchange into a net leases property which is a property that has a lease of call it 10-15 years on it where the tenant covered all management and you just receive checks. It is the most passive form of realestate ownership. Happy to speak more on this or otherwise.\n\nThis would allow you to own a realestate asset with no managment and provide cash flow to you, a trust, or whomever you want. \n\nDon\u2019t just think of a CVS or Burger King or big box store. There are all types of property and the key is to buy well located realestate so that when the lease is up you can put a new tenant in place. Like all realestate not all of these deals are crates equally.", "replies": [{"id": "im32qc9", "text": "Thanks for the advice and information.", "replies": [], "depth": 2}, {"id": "im36pdj", "text": "100% this ^", "replies": [], "depth": 2}], "depth": 1}, {"id": "im4nlik", "text": "My company can leverage an already owned commercial building to help fund the purchase of other properties or investments if either of you decide to try to get into real estate investing.", "replies": [{"id": "im4nnrr", "text": " https://jeremyr.deedfunds.com/", "replies": [], "depth": 2}], "depth": 1}, {"id": "im50ls1", "text": "Put it in a family trust.", "replies": [], "depth": 1}, {"id": "im63oom", "text": "What is the purpose of giving it to her now as oppose to giving her all the income from the property and leaving it to her in the will? \nIn that case she will enjoy the step up in basis of the property.", "replies": [{"id": "ima5d9v", "text": "that basis is already stepped up from the first inheritance no?    Why add a lifetime of owning a property you don't want if there are no tax issues with selling right now", "replies": [{"id": "imaa2s2", "text": "If she wants to sell yes.\nI am not sure how old you are. But potentially she can hold it forever and keep this or other properties through 1031 exchanges until you die and then she will get a step up for future appreciation.\nShe can also do exchange into syndicated TIC or contribute into REIT and be passive investor.", "replies": [], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "ima5jgn", "text": "what kind of property is it and why can't you handle it?  Are you asking from a tax/inheritance perspective or just a \"should I give this to my kid\" vantage point?\n\nIf it isn't an investment either of you want maybe just sell it?", "replies": [{"id": "imblai1", "text": "I am torn between whether I should give it to her now or leave it as inheritance.\n\nIt is a commercial property that my mother owned and passed on to me when she recently passed away. I recently went back to university to pursue a PhD. My focus is on that, my career and another business that is giving me income. I just don't have the time and to be honest just not interested. My daughter is more in line with this path.", "replies": [], "depth": 2}], "depth": 1}]