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Land/property and taxes
Posted on 9/30/14 at 6:27 pm
Posted on 9/30/14 at 6:27 pm
If I had property worth about 200k and I wanted to give/gift it my son now, what would be the tax implications on that?
1
Posted on 9/30/14 at 6:58 pm to TigerSaint1
None provided you haven't already eaten through the lifetime gift/estate exemption of over 5.3 million per person.
If you give more than 14K to one person in one year, you need to file a federal gift tax return, but you won't owe any tax.
If you give more than 14K to one person in one year, you need to file a federal gift tax return, but you won't owe any tax.
Posted on 9/30/14 at 7:37 pm to LSUFanHouston
And if I have another child that I want to give $200k cash to, would the tax implications be the same? And would these both deduct from the lifetime gift & estate exemption?
Posted on 9/30/14 at 8:27 pm to TigerSaint1
Yes - talk to your CPA about filing an advancement form
Posted on 9/30/14 at 10:45 pm to TigerSaint1
There is no difference tax wise.
At that amount, I'd probably spend $500 on an appraisal for the land. It will make sure the IRS doesn't squark about the gift value, and it will ensure neither of the kids ever think they got ripped off compared to the other. Also, have an attorney draw up the gift documentation.
If you are married, you can split up the gift between you and your wife, so you each use a part of your exemption. Remember, the first 14K per donor, per donee, you don't have to use any of your exemption.
So, if you are married and you and your spouse gift land to your child and their spouse, and the land is 200K, for you and your spouse, each the first 28K doesn't use the exemption, and the remaining 72K would go against the exemption. If you split with your wife but make the gift only to your child (not child spouse) then the first 14K would not use the exemption for each of you, and the remaining 86K would. If it's just you giving to your child, 14K doesn't go against it, 186K would.
At that amount, I'd probably spend $500 on an appraisal for the land. It will make sure the IRS doesn't squark about the gift value, and it will ensure neither of the kids ever think they got ripped off compared to the other. Also, have an attorney draw up the gift documentation.
If you are married, you can split up the gift between you and your wife, so you each use a part of your exemption. Remember, the first 14K per donor, per donee, you don't have to use any of your exemption.
So, if you are married and you and your spouse gift land to your child and their spouse, and the land is 200K, for you and your spouse, each the first 28K doesn't use the exemption, and the remaining 72K would go against the exemption. If you split with your wife but make the gift only to your child (not child spouse) then the first 14K would not use the exemption for each of you, and the remaining 86K would. If it's just you giving to your child, 14K doesn't go against it, 186K would.
Posted on 10/1/14 at 12:13 pm to LSUFanHouston
Good point about the appraisal...which is esp important for establishing a recent basis value for the property. Should the property be sold at a loss in a few years (you never know what happens a few years down the road), the recipients will be in a better position to claim the loss. If you only had a documented value from 40 years ago when the property was worth much less, they would have a much harder time justifying the loss.
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