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Posted by joetaxpayer on March 10, 2007, 2:30 am
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Ron Rosenfeld wrote:
> We purchased property some years ago -- raw land for $30K.
>
> It's not liquid, but it's probably worth a lot more today.
>
> If we were to give it to our children, how do we value the
> property for gift tax purposes? What would their basis be?
>
> "We" are husband and wife.
>
> "They" are son (of one of us) and daughter-in-law.
There are two issues:
Basis - doesn't change, the land cost $30K and the only
change to basis is upon sale to a new owner or death of the
original owner.
Gift Tax - you are permitted to gift $48K this year (two of
you, times two recipients is 4 X $12K tax free gift amount)
Above this, you either need to pay gift tax or tap your
lifetime unified credit. You can arrange the gift in
installments to give 1/2 share this year, 1/2 next year, if
the current value is under $96K. Don't know how long "some
years" is. You need to have it appraised.
JOE
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Posted by brownie on March 10, 2007, 2:30 am
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> We purchased property some years ago -- raw land for $30K.
>
> It's not liquid, but it's probably worth a lot more today.
>
> If we were to give it to our children, how do we value the
> property for gift tax purposes? What would their basis be?
>
> "We" are husband and wife.
>
> "They" are son (of one of us) and daughter-in-law.
Value of the gift is FMV of the property. Their basis in the
property is your current basis + any gift tax, if any, that
you may need to pay on the appreciated value of the propery.
<< ======================================================= >>
<< 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 Shyster1040 on March 11, 2007, 4:09 am
Please log in for more thread options To value the property for gift tax purposes, you would need
to get a valuation appraisal. Congress recently enacted
provisions requiring that a valuation be a "qualified
appraisal" received from a "qualified appraiser" that, while
clearly applicable to charitable donation valuations for
income tax purposes, may also apply for gift tax valuation
purposes as well.
Until and unless the IRS issues rules that except gift tax
valuations from the new provision, you would be best advised
to obtain a "qualified appraisal" from a "qualified
appraiser" in valuing the property in question.
With respect to the basis that your son and daughter-in-law
would take, it would, in general, be the same as your
current basis in the property (i.e., generally, what you
paid for it, plus any other expenses you paid that you had
to capitalize into your basis).
<< ======================================================= >>
<< 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 Ron Rosenfeld on March 11, 2007, 4:09 am
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> We purchased property some years ago -- raw land for $30K.
>
> It's not liquid, but it's probably worth a lot more today.
>
> If we were to give it to our children, how do we value the
> property for gift tax purposes? What would their basis be?
>
> "We" are husband and wife.
>
> "They" are son (of one of us) and daughter-in-law.
The consensus seems to be that the value of the gift, for
gift tax purposes, is the FMV of the property at the time of
the gift(s).
Given the appreciation, we'd have to gift it to them over a
few years, but that should not be an issue.
Thanks to all.
--ron
<< ======================================================= >>
<< 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 Harlan Lunsford on March 12, 2007, 4:53 am
Please log in for more thread options Ron Rosenfeld wrote:
>> We purchased property some years ago -- raw land for $30K.
>>
>> It's not liquid, but it's probably worth a lot more today.
>>
>> If we were to give it to our children, how do we value the
>> property for gift tax purposes? What would their basis be?
>>
>> "We" are husband and wife.
>>
>> "They" are son (of one of us) and daughter-in-law.
> The consensus seems to be that the value of the gift, for
> gift tax purposes, is the FMV of the property at the time of
> the gift(s).
>
> Given the appreciation, we'd have to gift it to them over a
> few years, but that should not be an issue.
No need to do that. If you make the gift, you'll need to
file a gift tax return, but chances are high that you'll pay
no tax.
ChEAr$,
Harlan Lunsford, EA n LA
<< ======================================================= >>
<< 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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