Posted by Rosalind on February 29, 2004 at 17:12:55:
Thank you Frank,
I will
Gift of Equity - Posted by Rosalind
Posted by Rosalind on February 28, 2004 at 22:41:16:
I sold my home to my brother. I gave him $25,000 in gift equity. Can I claim this on my taxes and how much of a credit will I received.
Re: Gift of Equity - Posted by Frank Chin
Posted by Frank Chin on February 29, 2004 at 06:28:25:
Rosalind:
Unfortunately, the Donor, i.e. YOU, is responsible for Gift Taxes. Get hold of IRS publication 950 “Estate and Gift Taxes”, and form 709.
Each person can give another person $11,000 gift per year tax free. You can gift him $11,000 for this year, have him give you two notes, one for $11,000, and another for $3,000, totalling $25,000 over three years. You forgive the $11,000 note next year, and the balance of $3,000 the year after.
This way, you gifted the entire amount “Gift Tax free”. If he’s married, you can give him and his wife $11,000 each.
We done RE gifting within our family, and that’s how we did it, as advised by a CPA/attorney (who specialized in taxes). To be valid, the notes must charge interest.
To can gift the whole $25,000 tax free, but you’ll use up the unitary credit somewhat, which affects estate planning, that you may not want to do.
Best thing is to have a CPA or Estate attorney advise if it is too confusing.
Frank Chin
Re: Gift of Equity - Posted by rm
Posted by rm on March 01, 2004 at 15:18:49:
They should add your name and likeness to the top of the forum.
Thanks for participating.