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11-25-2008, 02:10 PM
| | Junior Member | | Join Date: Nov 2008
Posts: 1
| | | gift tax
What is the name of your state (only U.S. law)? Colorado
I would like to know if my parent gives me their house:
1. Do I have to report the property to the IRS as gift?
2. Does my parent have to report gift tax to the IRS and which form?
3. Do I have to report when I sell the property?
Thanks for all advices. |
11-25-2008, 02:56 PM
| | Senior Member | | Join Date: Mar 2006
Posts: 5,019
| | | 1. No, they do.
2. See #1. Form 709 and accompanying schedules. I recommend a tax professional.
3. Probably. You take the parent's basis. If you live in the house under the then rules, you may not have to report the sale (our office does even if 121 applies). If not, it is a capital gain.
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11-25-2008, 02:59 PM
| | Senior Member | | Join Date: Feb 2007
Posts: 5,487
| | | If the property is valued at more than $12,000 (each, could give $12,000) the GIVER must report it to the IRS on form 709. The recipient is not obligated to do anything. If they exceed their lifetime exclusion from gift/estate tax (currently a million), they owe the gift tax.
When you sell the property you owe capital gains tax based on their basis, which is what they paid for the property (plus any capital improvements made over the year). You subtract that from what you sell it for and that's the gain. Now, currently, you get a $250,000/per person gain if you live in the property for two years aggregate exclusion from that gain. | |
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