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Posted by Nicky on January 18, 2007, 3:23 am
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I bought a condo a few years back, paid $45K, units now
selling for $70K. Both my boys living there, and going to
school. One will graduate this May, the other should follow
in a year. I would like to give them the place as a gift.
What would be the best approach to minimize the tax burden?
Thanks,
-nick
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Posted by Benjamin Yazersky CPA on January 19, 2007, 1:01 am
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> I bought a condo a few years back, paid $45K, units now
> selling for $70K. Both my boys living there, and going to
> school. One will graduate this May, the other should follow
> in a year. I would like to give them the place as a gift.
>
> What would be the best approach to minimize the tax burden?
First of all this is a gift tax, not an income tax issue.
Gifting outright will use up some of your lifetime
exclusion. However, gifting it over a few years by using
only the max allowable exclusion amount each year might
work. Another approach would be to sell it to the boys for a
mortgage. Then you gift down the mortgage up to the max
allowable exclusion each year.
___________________________________
<<< Benjamin Yazersky, CPA [NJ & NY] >>>
-----> real address on hobokeni or hobokenx <-----
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<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
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Posted by kastnna on January 19, 2007, 1:01 am
Please log in for more thread options > I bought a condo a few years back, paid $45K, units now
> selling for $70K. Both my boys living there, and going to
> school. One will graduate this May, the other should follow
> in a year. I would like to give them the place as a gift.
>
> What would be the best approach to minimize the tax burden?
Follow the link below. Their answer is short and concise.
Pay close attention to the basis repercussions and the
potnetial need for annual reappraisal. Hopefully, the basis
adjustments won't come into play because the childrens' gain
at sale will not be above the exclusion limits.
http://thinkglink.com/Gifting_Property.htm
Good luck.
<< ======================================================= >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2006) - All rights reserved. >>
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Posted by Seth Breidbart on January 19, 2007, 1:01 am
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> I bought a condo a few years back, paid $45K, units now
> selling for $70K. Both my boys living there, and going to
> school. One will graduate this May, the other should follow
> in a year. I would like to give them the place as a gift.
>
> What would be the best approach to minimize the tax burden?
Who is married?
If none, you can give them each $12K worth of equity each
year; in about 3 years, that's all of it. If you're
married, you (and your spouse) can give each $24K per year,
so they get it all by next year. (If they're married, the
amount similarly increases.)
Seth
<< ======================================================= >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2006) - All rights reserved. >>
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Posted by joetaxpayer on January 19, 2007, 1:01 am
Please log in for more thread options Nicky wrote:
> I bought a condo a few years back, paid $45K, units now
> selling for $70K. Both my boys living there, and going to
> school. One will graduate this May, the other should follow
> in a year. I would like to give them the place as a gift.
>
> What would be the best approach to minimize the tax burden?
You have a few choices.
Gift them partial ownership, at the rate of $12K/year per
child.
Gift the whole amount and file the paperwork for the amount
in excess of $24K, and take the unified credit against it.
(i.e. you are reducing the amount you can leave them when
you pass on) Sell them the property for market value, but
take back a note for the excess (the amount over the $12K
per) and 'forgive' the $12K/ year. Gift them money in
07,08,and 09, then sell them the property for the cash.
I think that's it.
JOE
<< ======================================================= >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2006) - All rights reserved. >>
<< ======================================================= >>
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