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Land - Gift Tax

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P

P-Nutz

Guest
I am receiving a 1/2 acre lot of land as a gift from my Grandmother. The land is located in Greenwich, Connecticut. There is no house or any other permanent structure located on the land. The land has not yet been appraised, but I expect the the FMV to be around $200,000. My question is: In order to obtain legal ownership of the land do I need to pay gift tax?

I have received conflicting reports - some say yes, others say no. According to the research that I have done, I calculate that I will owe the Federal Gov't $62,300 (I used the Federal Gift Tax Table for property ranging from $150K - $250K) The tax of the first $150K = $38,800 + (the remaining $50K x 32%) or $38,800 + $16,000 for a total of $62,300. Any advice is greated appreciated.

Thanks,
Pete.
 


L

loku

Guest
You will have the legal ownership of the land the moment the deed is signed and delivered to you as a gift. That has nothing to do with the gift tax.

However if your grandmother gives you the gift, she will be liable for any gift tax on the gift. Remember, there is a lifetime exclusion to be applied against any taxable gifts. For gifts given in 2002, the exclusion is $1,000,000. So unless your grandmother has otherwise used up the $1,000,000 exclusion, there would be no tax on this gift—although a gift tax return would be required.
 

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