gift tax question

[tommyboy]

What is the name of your state? california
I inherited the house I co-owned(1/2) with father who passed away.
I would like to sell house and share profits with my siblings to make a more equitable distribution of his assets.
I would be gifting about$45k to each, not exceeding a million dollars. it would not take me over the million dollar threshold in lifetime gifts.
would I owe gift or capital gains taxes?What is the name of your state?

[seniorjudge]

Originally Posted by tommyboy

What is the name of your state? california
I inherited the house I co-owned(1/2) with father who passed away.
I would like to sell house and share profits with my siblings to make a more equitable distribution of his assets.
I would be gifting about$45k to each, not exceeding a million dollars. it would not take me over the million dollar threshold in lifetime gifts.
would I owe gift or capital gains taxes?What is the name of your state?

Q: would I owe gift or capital gains taxes?

A: You have a very complicated situation since you owned the house before pa died. Go to a tax CPA. He will want to know if y'all owned it as joint tenants or tenants in common. If you want to give money away, then the gift recipients should pay the taxes.

[LdiJ]

Originally Posted by seniorjudge

Q: would I owe gift or capital gains taxes?

A: You have a very complicated situation since you owned the house before pa died. Go to a tax CPA. He will want to know if y'all owned it as joint tenants or tenants in common. If you want to give money away, then the gift recipients should pay the taxes.

Senior Judge, I have the utmost respect for you, but you really shouldn't be answering questions on this forum unless you are certain of the answers.

While morally the recipients of gifts maybe should be the ones responsible for taxes, legally its the gifters that are responsible.

[LdiJ]

Originally Posted by tommyboy

What is the name of your state? california
I inherited the house I co-owned(1/2) with father who passed away.
I would like to sell house and share profits with my siblings to make a more equitable distribution of his assets.
I would be gifting about$45k to each, not exceeding a million dollars. it would not take me over the million dollar threshold in lifetime gifts.
would I owe gift or capital gains taxes?What is the name of your state?

If you haven't exceeded your lifetime basis for gifting, then no gift taxes would be involved. It would be necessary for you to file a gift tax return, but you wouldn't owe any taxes.

However, capital gains and capital gains taxes would be involved.

Your "basis" in 1/2 of the property would be your father's basis...the price he paid for 1/2 of the property plus improvements...or 1/2 of the initial cost basis if the two of you bought the property together....plus 1/2 of any improvements.

Your basis in the other half of the property would be the Fair Market Value on the date that your father passed....or on the alternate valuation date, six months later.

So...you will likely have some capital gains, and therefore owe some capital gains taxes, and should adjust your "gift" accordingly.