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Posted by Paul Thomas, CPA on May 14, 2008, 2:09 pm
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> To ease the burden of inheritance taxes, I am wondering if a parent can
> give
> a gift of $10K per year to a child in the form of an interest in a
> property.
> Say that the parent owns a home worth $2M on today's market value. Can
> the
> parent give $10K worth of the property to the child each year and escape
> any
> tax obligations to parent or child on that gift?
Yes, but it's $12K per year, per person. But that means other gifts would
have to not be given (birthday, Christmas, etc) without tripping the gift
tax return requirement.
> When the property is sold, I assume the child must then pay capital gains
> on
> the full property value he owns, with the basis for his portion adjusted
> to
> $0 since he paid nothing for it?
Basis of teh parent transfers to the child.
FYI: This is generally handled through some form of family trust. If this
is an issue for a real situation, consult a tax attorney familiar with
estate and gifting issues.
--
Paul A. Thomas, CPA
Athens, Georgia
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