land gift

I am planning to build a house in Charlestown, Indiana in about a year, my father owns some land and has offered to give me an acre to build on. I am wondering what is the best way to avoid paying taxes, for him to gift it to me or for me to buy the acre for a dollar? Thank you.

Gift of land

I would suggest that he give it to you as a gift. There is no income tax on giving or receiving a gift, and there is an annual exclusion from gift tax of $10,000 per donee ($20,000 if the spouse joins in the gift). That means there is no gift tax if the value of the land is less than $10,000 ($20,000, if your mother joins in the gift). And even if the value of the land is more than $10,000 (or $20,000), there is a lifetime gift tax credit that will cover it.