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Real Estate Gifting

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pmenke

Guest
My father and stepmother would like to gift a cabin property to their five children (me included),in the state of Minnesota.
And the idea is that two of us would purchase the three other shares from the other children. I'm trying to figure out if there is a best way to negotiate such a transaction… i.e. avoiding any capitals gains for anybody, giving the cabin to the two of us and then we pay off the others, etc., etc.? Any thoughts?

The state has the property valued at $37,000 for tax assessment. It would probably sell between $50-70,000 on the market.
 


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Birdie

Guest
YOU WROTE: My father and stepmother would like to gift a cabin property to their five children (me included),in the state of Minnesota.

I am not an expert, but I happened to be surfing this page and noticed your topic. I just consulted an attorney about this last week because my family was considering doing the same thing for me. Here's the deal... Any person can gift to any other person a total of $10,000 per person per year without paying gift tax. That $10,000 can be in cash or in the form of property value. So each parent can gift each of the five children $10,000 worth of value in the property each year (a total of $100,000 worth of property per year).

You can buy out your siblings by paying them up to $10,000 each per person per year without paying gift tax.

I'm not so sure if you can get around the capital gains issue, however. I only know that my CPA recently told me if you are in the 15% tax bracket or less, your capital gains will be 10%. If you are in anything higher than a 15% federal tax bracket, your capital gains will be 20%.

Again, I am not an expert in any way, and do not stand behind this information as absolute. But this is what was recently told to me by an attorney and a CPA. Hope that helps. :)
 

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