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GIft tax

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P

Pinkskunk

Guest
Hi,
Under the current federal and state GIFT tax law, can my mother legally split up her house to all four of us? She wants to do it over the next 2-5 years and the home is worth about $100K. Can she give it away but still have her name as the owner (as long as she live there and not selling it) but after it is sold, the money is to be split up in 4?

If so, what is the best way to do it? if i decide not to use a lawyer.
 


L

loku

Guest
She can not give away the house and keep title in her own name. In fact, if she is planning on selling the house, then giving the four of you the money, she would be better off keeping the house till then. If she owns the house at the time of the sale, there would be no income tax on the gain on the sale because it would have been her main residence for at least 2 of the last 5 years before the sale.

So the easiest way to do it is to have her keep the house. When she sells it, then give you four the money. Her lifetime exemption for the estate and gift tax would be applied and there would be no gift tax on the gifts. For an explanation of how this works, see https://law.freeadvice.com/tax_law/gift_tax_law/unified_estate_gift_tax.htm. This way, there would be no tax at all on any part of the transaction.
 

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