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Subject Author Date
life time gift tax? sendgarysemail 04-19-2006
`--> Re: life time gift tax? Paul Thomas, CP...06-04-2006
Posted by sendgarysemail on April 19, 2006, 12:57 am
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 ok, my mother in law has a property that she lived for 3
years, then rented 2 years so now 5 years later is going to
sell it. She is selling for 200,000 wants gift us the
money.

Can she use the one time gift to us? And since we are
receiving..we don't have to pay tax on that..correct?

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Posted by Phil Marti on April 20, 2006, 3:24 pm
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> ok, my mother in law has a property that she lived for 3
> years, then rented 2 years so now 5 years later is going to
> sell it. She is selling for 200,000 wants gift us the
> money.
>
> Can she use the one time gift to us?

There is no "one-time" gift provision. She will have to
file a gift tax return. Assuming this is the first taxable
gift she's made, she'll use some of her unified credit.

> And since we are
> receiving..we don't have to pay tax on that..correct?

Correct. Gifts are not taxable income. Publication 525.

Not that you asked, but if this is a stab at do-it-yourself
estate planning or asset purging in contemplation of
Medicaid, urge MIL to get professional guidance. These self
efforts tend to blow up in people's faces.

--
Phil Marti
Clarksburg, MD

<< ======================================================= >>
<< The foregoing is intended for educational purposes only >>
<< and does NOT constitute legal OR professional advice. >>
<< >>
<< The Charter and the Guidelines for submitting >>
<< messages to this newsgroup are at www.asktax.org. >>
<< Copyright (2006) - All rights reserved. >>
<< ======================================================= >>

Posted by bbs on April 20, 2006, 3:45 pm
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Your mother in law will probably pay an income tax on the
sale (all of which may or may not be sheltered by the
section121 exclusion). The gift will then trigger a gift
tax if it is in excess of the annual gifting amount
(currently $12K) and if your mother in law has already used
up her lifetime gifting amount (currently $1 million).

Gary Brolis
http://www.MechanicsofMoney.com
http://www.MechanicsofMoney.com/blog.php

<< ======================================================= >>
<< The foregoing is intended for educational purposes only >>
<< and does NOT constitute legal OR professional advice. >>
<< >>
<< The Charter and the Guidelines for submitting >>
<< messages to this newsgroup are at www.asktax.org. >>
<< Copyright (2006) - All rights reserved. >>
<< ======================================================= >>

Posted by Seth Breidbart on June 3, 2006, 10:03 am
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>> ok, my mother in law has a property that she lived for 3
>> years, then rented 2 years so now 5 years later is going to
>> sell it. She is selling for 200,000 wants gift us the
>> money.

> She'll still have to pay tax on her gain on the house sale.

Isn't it excludable, providing she sells soon enough?

Seth

<< ======================================================= >>
<< The foregoing is intended for educational purposes only >>
<< and does NOT constitute legal OR professional advice. >>
<< >>
<< The Charter and the Guidelines for submitting >>
<< messages to this newsgroup are at www.asktax.org. >>
<< Copyright (2006) - All rights reserved. >>
<< ======================================================= >>

Posted by Paul Thomas, CPA on June 4, 2006, 1:13 am
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>>> ok, my mother in law has a property that she lived for 3
>>> years, then rented 2 years so now 5 years later is going to
>>> sell it. She is selling for 200,000 wants gift us the
>>> money.

>> She'll still have to pay tax on her gain on the house sale.

> Isn't it excludable, providing she sells soon enough?

"then rented 2 years"

Not on the depreciation "allowed or allowable" for the
rental period. The remainder of the gains would be tax free
if they fall within the allowed exclusion amount.

--
Paul Thomas, CPA
paulthomascpapc@bellsouth.net

<< ======================================================= >>
<< The foregoing is intended for educational purposes only >>
<< and does NOT constitute legal OR professional advice. >>
<< >>
<< The Charter and the Guidelines for submitting >>
<< messages to this newsgroup are at www.asktax.org. >>
<< Copyright (2006) - All rights reserved. >>
<< ======================================================= >>

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