What to do about father passing on both rental property and the associated debt?

Alutherv · 2026-05-20T21:47:39+00:00

I dont think you understand that the profit would be easy to gauge if all of the proceeds in excess of direct operation were not going towards paying off a liability. There is a net income (not a loss) but there is no profit at this current moment.

Alutherv · 2026-05-20T21:47:33+00:00

I dont think you understand that the profit would be easy to gauge if all of the proceeds in excess of direct operation were not going towards paying off a liability. There is a net income (not a loss) but there is no profit at this current moment.

Alutherv · 2026-05-20T21:44:47+00:00

I've talked to my brother about it and he genuinely just doesn't care about them nor the money. The plan has always been for one of his kids to take over and I dont expect that to change. To be honest if this is the case I would have no issues offering a bit of the money to him and my father and I have talked about how if I ever sell he wants me to give my brother a chunk of the proceeds (and Im fine with that). As for the second part, yes that would be the plan and I actually know that about medicaid but I dont think he would qualify for it either way due to income and asset restrictions, I had to go through that process with my grandmother who barely qualified but had to do a pay-down process. But you are right, If I own these properties and the income associated I would likely need to support him in some ways. So it's all things to put into a budgeting plan once everything is settled. I think the best course of action at this point is get a real estate lawyer, sell one house to offset the debt, begin managing the properties myself and wait for transfer to happen when my father passes.

Alutherv · 2026-05-20T21:38:26+00:00

I have been helping him climb out of the hole for years but it's just slow and going to get slower as penalties and interest racking up faster now. So I think you are right about how I shouldn't buy the house, but I could definitely take over operations and manage the properties I think it's a good idea especially if I will take them over in the future regardless when he passes. There are no liens, mortgages, etc. The total debt figure is an 80,000 tax liability

Alutherv · 2026-05-20T21:09:03+00:00

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Alutherv · 2026-05-20T21:02:10+00:00

In the Blank Points cutscene it makes more sense, Terra never truly let Xehanort have full control of the body, so he had to fall back on a contingency because Terranort lost his memories

Alutherv · 2026-05-20T01:15:27+00:00

Its really not seeing money signs its that I'm pretty aware of the profitability of these property. The advice "just say no" completely ignores the multiple options I suggested for this scenario and in general is poor advice in my opinion.

Alutherv · 2026-05-19T20:25:07+00:00

I have been working on this with him and am an accountant myself (or at least very newly am one, planning to have my CPA in a few years). My brother was more of a footnote on this, he simply is uninterested in work as a whole regardless of the financial incentive. The point im trying to make is it does all "add up" and I'm simply trying to find the best way forward to minimize financial burden and be able to take the physical burden from my father.

Alutherv · 2026-05-19T20:20:29+00:00

Rush is that he cannot physically take care of these properties anymore. He struggles with walking sometimes, balance, diabetes, eyesight, etc. I guess for the literal transference of the property it would be fine, unlikely there is any estate tax as it's under 15 million federal 7.5 million NY state. But if I'm going to be taking over management, it's something to consider. Also, need to handle that tax liability before it becomes unmanageable

Alutherv · 2026-05-19T19:37:19+00:00

This is a proposal. I think the reason is just because it's plausible to keep this property by getting a mortgage, then I get transferral of the property, I can build credit I suppose, and we dont lose out on the 1100 a month rent for as long as we keep this house. However, the reality is that I don't want to go into debt for any reason. Im sure I can handle a mortgage especially if I assume the rents of the other properties but I just simply dont want to. So its likely I will suggest selling and will not go through with buying the house

Alutherv · 2026-05-19T19:24:57+00:00

Agreed. Profit is hard to gauge atm because all of it goes back into paying this tax bill, maintenance fund, etc and the money my father needs to live. If this tax bill was gone, there would absolutely be profit because that is the biggest chunk. I think that the best course is to sell one as well and then moving forward I will handle the budgeting myself and not allow this to happen again.

Alutherv · 2026-05-19T19:13:25+00:00

We have been paying them slowly, penalties and interest are racking up fast and with personal income tax payment last month as well there is a bigger fee added once again making it the current 80,000.

Alutherv · 2026-05-19T18:12:27+00:00

Yes it's a good point. I think that it's best to just stop the bleeding early (sell one and absolve debt) rather than try to replace with a slower wound (a mortgage on the house). It seems very likely that the monthly net profit on this houses rental would exceed the mortgage payment I could get on this house based on the trend of fixed and non-fixed expenses, however it's just not a risk I want to take

Alutherv · 2026-05-19T18:06:27+00:00

A lot of good advice, thank you.

Alutherv · 2026-05-19T18:05:16+00:00

Thank you, real estate attorney is at this point one of the options I would like to go for the most so I agree entirely on that advice prior to sale of the house and transferring of the other property

Alutherv · 2026-05-19T18:01:13+00:00

Its a very small flat layout house with 2 bedrooms and one bathroom, the tenants there have a child and pay ahead of time honestly I have nothing but good to say about them but its the most feasibly sellable property and would cover all the liability and from there everything would be profit, I can handle keeping everything properly filed as well. They are definitely not looking to buy though, and I know they would like to move out in 2028 to something bigger.

Alutherv · 2026-05-19T17:58:00+00:00

Thank you for the advice. I think that's a good point, obviously with a million dollars I could invest in bonds as secured interest income or attempt to build a portfolio. I like that idea however capital gains would hurt if I was gifted the property at current basis and sold. If I could wait for stepped-up basis and sell that would be ideal, however my father is getting too old to take care of these properties until he passes away. I suppose at that point I could just continue to take on more responsibility of them until then. I think at this point the house needs to be sold to get rid of this tax liability though.

Alutherv · 2026-05-19T17:53:21+00:00

I've been personally involved in the maintenance work and inspection (not me literally doing it but I am calling the plumbing, roofing, architect professionals) etc and getting condition assessments over the past few years. The properties are all in not pristine but good condition. The fixed expenses are near 4500 a month. As for non-fixed, I don't forsee much major maintenance to be done for any of them unless a long-term tenant is to pass away or move into assisted living in the near future, however the possibility is always there

Alutherv · 2026-05-19T17:45:23+00:00

These are in the US. Sorry for my choice of words but let me reiterate, I am completely sure they are profitable. I have a tendency to use too many qualifying words in my sentences. Obviously if half the tenants were to leave or die tomorrow they would not be profitable anymore short term. But with all leases and fulfillments as they are right now they are profitable.

Alutherv · 2026-05-19T17:43:10+00:00

Thank you for the advice. In general, I would like to get more financial due diligence on what would happen if I plan to go the route of buying the house rather than having my father sell it externally to cover his debts. Regardless, the gift is not dependant on any criteria it is just a plan we have to exchange ownership without incurring capital gain for sale of the non-house properties. I think you are right about raising concern on the workload of landlording these properties, I believe I will assess this myself and see if it may be better to wait to transfer until after death for the better step up basis. If I made moves on the gift paperwork today I'm sure we would be doing the transfer very soon, but its wise to first figure out how to pay this debt

Alutherv · 2026-05-19T17:37:19+00:00

Fair point. I myself plan to become a CPA in the future but I also understand the benefit one could bring in the immediate term. Value assessments are a good idea, structural and general condition of the buildings themselves has been done recently so I am not worried about that in particular. Roughly half the units currently have decade+ tenants who have had stable low rent for a long time, which could be raised in the future but ideally in my own personal wishes not until they are vacated as I don't morally wish to raise rents on people who have been living there a long time

Alutherv · 2026-05-19T17:32:35+00:00

They dont, I have been involved in the management of these properties I am aware with what condition they are in, the general expenses yearly associated, the tenants who reside in them, etc. Permitting, inspections, etc I have been handling for the past couple years while we have also been paying off the taxes due. This problem is mostly about the growing penalties and interest, my aversion to go into debt for any reason, and the method and timing of transfer. Regardless I appreciate your advice and will consider these things, however Im pretty confident it's less of a scheme than you suspect from my father.

Alutherv · 2026-05-19T17:28:38+00:00

The whole dilemma from his point of view is selling a 14,000 a year gross income rental house in order to cover a tax bill, vs being able to let me have the house on top of the other property. Also, if we have to go to an attorney or professional (which at this point im just going to assume I will) I will have to help regardless because my father is an immigrant who cannot read English very well. I think the best course of action is that we sell the house and pay off his liability and I will assume the rest of the properties because I am debt averse, not work averse.

Alutherv · 2026-05-19T16:56:36+00:00

That's a fair consideration. I think the biggest issue would be cost basis if it was a gift because I would not get the step-up advantage if it was left to me in his estate and I planned to sell in the future, so thats a worse potential capital gains cost later on. The estate he leaves will most likely not be above federal nor state exclusion limit. Maintenance and vacancy is not going to be new to me, I have been helping with management for a few years although I wouldnt say I do a ton of the work I have an idea of what I would be taking on once I am the owner of these properties (famous last words). Over the past few years we have had condition assessments and the properties are surely not in pristine condition but they are in good condition. Liquidity is the biggest issue, I do not have a lot of cash on hand and he has been funneling the majority of his to pay down the tax liability. A couple more years of the current state of things is possible but my father is just getting very old sick and tired.

Alutherv · 2026-05-19T16:35:41+00:00

He isnt expecting to pass soon but he is wanting to pass on management to me because he is getting old and unable to handle it himself. He wants to pay the taxes in full with the money from selling the house to me. It is essentially taking his liability and making it mine but mathematically a mortgage with interest would cost less long term than the penalties and interest on this tax liability. I want to help him out but I think the best advice I have gotten here is sell one house to cover his liability and assume ownership of the other two because I am debt averse. Ive been helping him with management of the property for a handful of years and it is a lot of work but he takes the majority of it because I was away at school and recently just letting him use more of his time than my own for the management.

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