Posted on: 30th Jan, 2009 06:59 pm
Hi, here's my situation.
My dad is the owner of my home, and it going to Quit Claim it to me. I will immediately pull out the equity to purchase a new home, and sell this one. We are unclear of the tax implications.
The home is owned free and clear.
Will he pay a gift tax?
Will there be capital gains tax as well, and for who?
Thank you for your time.
My dad is the owner of my home, and it going to Quit Claim it to me. I will immediately pull out the equity to purchase a new home, and sell this one. We are unclear of the tax implications.
The home is owned free and clear.
Will he pay a gift tax?
Will there be capital gains tax as well, and for who?
Thank you for your time.
Hi guest!
Welcome to forums!
If the property is a gift to you by your father, then your father will have to pay a gift tax. However, there are certain exemptions on gift tax. Transfers up to $13,000 per person per year are not subject to any kind of gift tax. Also a lifetime gifting limit of $1,000,000 is allowed before a gift tax is incurred.
If you sell off the property, you will be liable for the capital gains tax. This tax will depend upon the profit that you earn by selling off the property.
Feel free to ask if you have further queries.
Sussane
Welcome to forums!
If the property is a gift to you by your father, then your father will have to pay a gift tax. However, there are certain exemptions on gift tax. Transfers up to $13,000 per person per year are not subject to any kind of gift tax. Also a lifetime gifting limit of $1,000,000 is allowed before a gift tax is incurred.
If you sell off the property, you will be liable for the capital gains tax. This tax will depend upon the profit that you earn by selling off the property.
Feel free to ask if you have further queries.
Sussane
My mother put her house in the names of her 3 daughters years ago. The house was sold last year & the money was divided among us 3. The house was purchased in 1946 for $8500 & sold for $105,000. Do we pay capital gains on the house as a gift? Also 1946 prices would be a lot less than todays, how is that reconciled as far as profit?
Hi Willow,
If you sell your principal residence and gain a profit of not more than $250,000, you can exclude that from taxes. If it's more than that amount then you will have to pay capital gains taxes and report it on schedule D, caplital gains and losses. The gain or loss is determined in the following way:
Selling price - (minus) selling expenses = Amount realized on the sale
Amount realized on the sale - (minus) adjusted basis in the home = gain or loss on the sale
The adjusted basis in the home depends on purchase price of the house plus any improvements/additions on it minus any casualty losses/depreciation.
Thanks,
Jerry
If you sell your principal residence and gain a profit of not more than $250,000, you can exclude that from taxes. If it's more than that amount then you will have to pay capital gains taxes and report it on schedule D, caplital gains and losses. The gain or loss is determined in the following way:
Selling price - (minus) selling expenses = Amount realized on the sale
Amount realized on the sale - (minus) adjusted basis in the home = gain or loss on the sale
The adjusted basis in the home depends on purchase price of the house plus any improvements/additions on it minus any casualty losses/depreciation.
Thanks,
Jerry
property is in my name but other relatives are receiving an equal share ... is their part considered a gift... cap gains or inheritence? property was our parents but only in my name... llegal compications required agreement of all siblings to sell it and now they want to know what tax if any theyre responsible for
Hi francine,
If the property is in your name, why would they be entitled to an equal share of it. This is not very clear to me. However, If the property is transferred from you to your siblings, I don't think it would be inheritance. It cannot be a sale, thus no capital gain. But it can be considered as a gift and thus can be subject to a gift tax.
If the property is in your name, why would they be entitled to an equal share of it. This is not very clear to me. However, If the property is transferred from you to your siblings, I don't think it would be inheritance. It cannot be a sale, thus no capital gain. But it can be considered as a gift and thus can be subject to a gift tax.