Children's names on house deed

[chgo29]

I live in Indiana. I'm an old guy...86 yrs old....so I have my adult children's name on my house deed (quit claim deed). Now I am getting ready to sell the house. My children will have to sign off at the closing but they won't get the money...I will. They have asked me about tax implications. I know the house sale proceeds are not subject to "income tax"....and I am selling the house for $225,000 which is less than what it cost me so "capital gains tax" is not a factor. But what about "gift taxes"? Did I make myself subject to "gift tax" when I put their names on the deed?

 

[anteater]

Did I make myself subject to "gift tax" when I put their names on the deed?

You made them a gift, right?

And now they are making you a gift.

But, unless any of you has (or is likely to have) some big bucks (currently about $5.3 million and indexed for inflation) at the time of death, you likely don't have any tax to pay. Just an obligation to report the gift.

 

[justalayman]

I live in Indiana. I'm an old guy...86 yrs old....so I have my adult children's name on my house deed (quit claim deed). Now I am getting ready to sell the house. My children will have to sign off at the closing but they won't get the money...I will. They have asked me about tax implications. I know the house sale proceeds are not subject to "income tax"....and I am selling the house for $225,000 which is less than what it cost me so "capital gains tax" is not a factor. But what about "gift taxes"? Did I make myself subject to "gift tax" when I put their names on the deed?

well, I hope the children agree with your plan. As is stands you cannot sell their share of the property and they are entitled to their share of the proceeds. If you want something different, you best hope they are in agreement with your ideas.

 

[chgo29]

Thanks justalayman

well, I hope the children agree with your plan. As is stands you cannot sell their share of the property and they are entitled to their share of the proceeds. If you want something different, you best hope they are in agreement with your ideas.

Thanks for your reply. Yes, they agree with the plan. But, what about the question. Does anyone know what the rules are about gift taxes and how they would apply to this situation.

 

[Zigner]

Thanks for your reply. Yes, they agree with the plan. But, what about the question. Does anyone know what the rules are about gift taxes and how they would apply to this situation.

The first response answered your question.

 

[anteater]

But, what about the question. Does anyone know what the rules are about gift taxes and how they would apply to this situation.

Duh... When you added them as owners, you made a gift to them.

Now that you (plural) are selling, they are gifting you their proceeds from the sale.

Currently (2015), you can make a gifts with a value of up to $14K (the annual exclusion) to as many people as you wish in any one year. Greater than that to any one person in a year and you have to report the gift on Form 709. (That annual exclusion was lower in prior years.)

http://www.irs.gov/pub/irs-pdf/i709.pdf