Posted on: 22nd Feb, 2007 08:00 pm
my wife and I are selling our home to my brothers uncle in the tune of 400K the home is valued at 550K. Can I give the difference as a gift of equity without a tax penalty What could be the down side and to whom would it effect
I Live in New Jersey
I Live in New Jersey
Welcome Wsteiner,
One can transfer property as gift of equity without tax penalty as long as the property is not valued beyond $12000. The property value worth $12000 is the tax exemption limit as far as paying gift taxes are concerned.
One can also avoid paying taxes if he qualifies for the lifetime gift tax exemption of $1,000,000.
One can transfer property as gift of equity without tax penalty as long as the property is not valued beyond $12000. The property value worth $12000 is the tax exemption limit as far as paying gift taxes are concerned.
One can also avoid paying taxes if he qualifies for the lifetime gift tax exemption of $1,000,000.
"What could be the down side and to whom would it effect"
You will have to pay applicable gift taxes as you are making the gift (donor). The annual exemption is $12,000 but you won't have to pay any gift tax as long as the total life time gift exemption of $1 million is not crossed. What you will be required to do is file gift tax return on Form 709 even though any taxes are not due.
Richard A. Brualdi
You will have to pay applicable gift taxes as you are making the gift (donor). The annual exemption is $12,000 but you won't have to pay any gift tax as long as the total life time gift exemption of $1 million is not crossed. What you will be required to do is file gift tax return on Form 709 even though any taxes are not due.
Richard A. Brualdi