Posted by Jack-E on January 21, 2010 at 15:14:37:
No answers? Surely someone has had this situation? Would a LLC or Land Trust help?
Gift Deeding Property - Posted by Jack-E
Posted by Jack-E on January 12, 2010 at 16:02:06:
If wish to gift a property to a son, is there any way I can do this and not cause a IRS taxable event?
Re: Gift Deeding Property - Posted by Frank Chin
Posted by Frank Chin on January 24, 2010 at 24:53:59:
Jack:
There are a few ways to do it.
Mechanically, you quit claim the property to your son. As it would appear such a gift would exceed the annual gift limit of $13,000, you’ll have to file a gift form, if you do it in one shot.
Second, you can do what my lawyer did, use the annual gift only. I am married with two daughters, and the $13,000 annual gift is per person. If my parents decide lets say to gift a house worth, say, $100,000, he can gift half of it one year to our family, that’s 4 times $13,000,totaling $52,000, then the remainder the following year.
My lawyers had notes made, then a letter of forgiveness for documentation. This way, there are no estate tax consequences on death.
Doing annual gifting per person of $13,000 or below requires no gift tax filing, but it would be a good idea to maintain records of what you gift, say with a note, and then forgiven.
Whether you do it in one shot, via a gift form, or with annual gifts has to do with the size of the eventual estate. There is a unitary credit where gifts on the gift form would eventually lead to higher estate taxes as gifts take away from the tax exemption on the estate at death, dollar for dollar.
In deciding one way or the other, you’ll have to know what the estate would look like at death, and what the tax laws will be. Currently the estate tax laws are in a state of flux.
Frank Chin