Limiting the tax bite on the family cottage
A few weeks ago, we featured a general article about how to engineer a tax-cost-effective transfer of the family cottage to the next generation.
Some readers were curious as to how much it might cost to use life insurance -- either to pay the capital gains tax required down the road or to provide some liquidity to adult children who would never use the cottage.
For most people, passing on a vacation property comes down to one of two options: Deferring taxes owing until the death of a surviving spouse or transferring ownership to the children now and pay any taxes owing up front.
Here's a more detailed look at the various options including joint, last-to-die insurance coverage (often paid by those lucky kids) -- with the caveat that professional advice is a must when going this route.
By Gordon Powers, MSN Money