Time Sensitive Real Estate / Tax Question!?

My father signed over his interest in a building in Los Angeles to me in 2002. He passed away early 2003. A tax lien in his name for taxes on another building was placed on the title of the house I took control of in late 2003. Now I'm trying to sell and after first being told by a lawyer friend (about 8 months ago) that I wouldn't be liable because the liability was attached to my father, my realtor is telling me that I am liable. The amount is substantial, so I would be eternally grateful for any advice or help.

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  • 1 decade ago
    Favorite Answer

    Do I understand that you have referred to three separate real estate properties? Two buildings and a residence? If the lien is recorded with the County Clerk, then it must be cleared before closing on a sale. Ask a Real Estate/Title Lawyer to investigate the lien, to be sure it is valid and properly filed of record.

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  • 1 decade ago

    Taxes are a very complicated, and in your situation, very serious, You should consult a cometent and experienced tax attorney.

    But, here is some information; as you mentioned, the liability was that of your late father; you will need to file a final tax return for him, thus informing the IRS and the State that he has passed on. The lien was filed against your father and all of his property, thus, as far as the county recorder's office is concerned, the lien will pass onto all of the properties under his name. If the properties were a part of his estate, then the liens will transfer with the estate to the properties.

    You have some options when it comes to the taxes, If you can prove to the IRS and the state that your father has passed away, then you may be able to push the taxes into a currently none collectible status, thus preventing further collection action, in which case you should be able to ask for a release of lien.

    You may also be able to ask for a subordination of the lien in order to sell the property, i which case, the lien will be suspended temporarily while you sell the property, the taxes will then be paid from the gains on the sale.

    Your other option may be to negotiate the taxes down and a possible settlement of the taxes for a much lower amount than the origional debt, both for the IRS and the state of CA; thus cleaning up the mess, and getting rid of the taxes.

    You should discuss your options with an experienced attorney who specializes ion taxes, or even a tax resolution firm.

    Hope this helps,

    Good luck

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  • 1 decade ago

    The laws in your state may be different but in most states the taxes are attached to the property not necessarily the person. In other words the property stands good for the taxes. I once purchased a piece of property with the last years taxes not paid, it did not show up in the title search because it had not been recorded yet. Guess what, I had to pay it. While I trust real estate people like I trust a used car salesman, I would say that in this instance he is right.

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  • 1 decade ago

    If the amount is substantial, you really are better off calling a real estate lawyer. Or try calling Bet Tzedek or the Los Angeles Free Clinic for a referral.

    Of course, your big mistake was getting your dad to sign over his interest in the building a year before his death...you missed out on getting the stepped up basis at the time of his death and are now saddled with his initial cost basis in the property. Oh well.

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  • 1 decade ago

    If your lawyer is a real estate attorney, who may also handle wills/probate and taxes, then you should have him file the appropriate documents other wise you may want to seek a better attorney. Remember to check your state's "Bar Association" Like Florida is known as the Florida Bar Association and check the attorney's practice histroy before hiring them. That is free and public information.

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  • 1 decade ago

    In general, you always have to pay tax leins on property you (now) own. If you dont in the specified period, the govt will forclose on your house. And normally you cant sell a house that has a tax lein on it. You may be able to work out some special deal with the government, but good luck.

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  • mikeae
    Lv 6
    1 decade ago

    You should consult a tax attorney in your area for this problem. The local Legal Aid society should be able to assist you in finding a good Tax Attorney.

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