Why it pays to serve on your condo board

Volunteerism spares association expense of court-appointed property manager

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In general, however, every homeowner has the absolute right to trim overhanging branches and to cut tree roots that are spreading onto his property. This is often referred to as "self-help." However, there is a caveat to this: If the action you take damages the tree, in some jurisdictions you may be responsible for reimbursing the tree owner for his loss. More importantly, if you cut the roots and this causes the tree to fall and hurt someone or damage property, once again, you may be held responsible.

In a case I handled several years ago, my client's neighbor had a large walnut tree and walnuts were constantly falling onto my client's property. The tree roots were damaging my client's rear sidewalk and garage. My client was quite concerned that self-help would cause the tree to fall, and cause damage to person and property.

Accordingly, when the next-door neighbors refused to cooperate, we sued them. One of the legal complaints we raised was that the tree was a private nuisance and must be removed. The neighbor's attorney argued with the judge that self-help was the only remedy. However, the judge agreed and upheld the count for private nuisance.

I don't necessarily recommend litigation, since it should be the last resort. In many other tree situations in which I have represented clients, we usually work out a satisfactory resolution between the neighbors.

DEAR BENNY: I would like to add my daughter's name to the deeds of properties that I own. What is the process and cost involved in doing this and how should it be worded so that she owns the property free and clear once I am deceased? --Doug

DEAR DOUG: I have to assume that you have not been reading my column, since I have on numerous occasions indicated that in my opinion it is not a good idea.

Let's take this example: You bought the house many years ago for $100,000 and for this discussion we will ignore any improvements you may have made. Your basis for tax purposes is $100,000. You put your daughter on title. She is not buying this from you so the law treats this as a gift. And the law is clear that the tax basis of the giver of the gift becomes the tax basis of the gift receiver.

Now the house is worth $500,000 when you die. You owned one-half of the house so your daughter's tax basis is $300,000. Why? Her basis was $50,000 when you gifted it to her (i.e., half of your basis). On your death, she will take advantage of what is known as the stepped-up basis, namely the value of the property on the date of death. The property was worth $500,000, so the stepped-up basis for half is $250,000.

If she sells the property for $500,000, she will have made a $200,000 gain ($500,000 minus $300,000), and will have to pay capital gains tax.

However, if you leave her the house in your will, she will get the full stepped-up basis and will not have any capital gains tax to pay if she sells for $500,000. Of course, if she sells for more than that, there will be tax on that additional amount.

So, in most cases, it does not make sense to gift your children the family home.

There is one possible loophole: If she will have owned and lived in the house for two out of the five years before it was sold, she can exclude up to $250,000 of any gain.

My suggestion: Please talk with a financial adviser before you take any action. You may not be doing a favor to your daughter. And if in the final analysis that is what you want to do, have a lawyer do the entire transaction.

Benny L. Kass is a practicing attorney in Washington, D.C., and Maryland. No legal relationship is created by this column. Questions for this column can be submitted to benny@inman.com.

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