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  1. #1
    arlieedwards is offline Junior Member
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    Gift Tax in Texas

    What is the name of your state? Texas.
    I realize that according to IRS rules, we can now give anyone $12,000 per year tax free, However, I want to gift my son and his wife and family a farm in Texas. Are there any gift tax implications for the Sate of Texas?
    In additioin, for IRS reasons, I plan to have the property appraised and will give my son, his wife and each of their infant children $12,000 each per year. The wife will do the same for a total of $96,000 per year from the two of us to the 4 of them each year until the place is completely given to them. Would that plan have any detrimental implications on the state tax end of it?

    Arlie EdwardsWhat is the name of your state? Texas
  2. #2
    xylene is offline Senior Member
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    Exclamation

    A plan to gift 96,000 a year over a number of years... that suggests a very substantial piece of property...

    While avoiding taxes is a laudable goal, don't make the mistake of foregoing professional advice on how to best proceed.

    There is such a thing as penny wise, pound (dollar) foolish. And I would think not seeing an expert CPA with estate / gift tax experience might fit that description.

    You need to consider the property tax implications and the like. Real estate transfer taxes. County fees...

    While the basic math multiples you suggest are sound, you should consult a pro to make sure all the hassle is even worth it, given the sizable gift tax exemptions you (and your wife) may have available.

    I can't comment on the Texas tax issues... my advice to seek professional counsel still stands equally.

    Do so before you embark on this plan.

    Also think of administrative costs. You might be spending big bucks to structure this arrangement and have no or very little tax due. Why spend more money to avoid a smaller amount in tax?

    Good luck.
    Last edited by xylene; 08-21-2007 at 07:31 PM.
  3. #3
    tranquility is offline Senior Member
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    It's usually better to start with your *goals* and then try to create a plan, rather than the reverse. Is there a problem with this? Well, it's perfectly legal, so no problem. However, it will leave the property in their hands with your basis, so they will have a much greater tax on it than if they inherited it. Unless your estate is so large you are trying to reduce estate taxes. If so, there are other avenues to try.

    But none can be suggested as the only goal I see is to get the property in the target's hands without filing gift tax returns.

    Is that your goal? What are you trying to accomplish?
  4. #4
    Indiana Filer is offline Senior Member
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    For the experts: Would it be a good idea for this person to gift the land to the infant children? Wouldn't that complicate things since those children would be, obviously, minors?
  5. #5
    LdiJ is online now Senior Member
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    Quote Originally Posted by tranquility View Post
    It's usually better to start with your *goals* and then try to create a plan, rather than the reverse. Is there a problem with this? Well, it's perfectly legal, so no problem. However, it will leave the property in their hands with your basis, so they will have a much greater tax on it than if they inherited it. Unless your estate is so large you are trying to reduce estate taxes. If so, there are other avenues to try.

    But none can be suggested as the only goal I see is to get the property in the target's hands without filing gift tax returns.

    Is that your goal? What are you trying to accomplish?
    Just to clarify.....Tranq means that should they decide to sell the property they would have your "basis" and would therefore have higher capital gains, therefore higher capital gains taxes. If they inherit the property their basis is the fair market value at the time that they inherit.
  6. #6
    LdiJ is online now Senior Member
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    Quote Originally Posted by Indiana Filer View Post
    For the experts: Would it be a good idea for this person to gift the land to the infant children? Wouldn't that complicate things since those children would be, obviously, minors?
    That could possibly be problematic. However not necessarily while they are minors, but later on down the road, when they are adults and perhaps their needs/wishes don't correspond with their parent's.
  7. #7
    arlieedwards is offline Junior Member
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    I wonder if it might be best to create a trust, put it all in a trust and then have me and mom as the president and vice president with the son and his wife holding junior offices. Then upon my and mom's death, they could just elect themselves as president and vice president?

    My object is to give it all to them without giving so much to uncle.
  8. #8
    LdiJ is online now Senior Member
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    Quote Originally Posted by arlieedwards View Post
    I wonder if it might be best to create a trust, put it all in a trust and then have me and mom as the president and vice president with the son and his wife holding junior offices. Then upon my and mom's death, they could just elect themselves as president and vice president?

    My object is to give it all to them without giving so much to uncle.
    You really should consult with an attorney that specializes in estate planning. A trust very well may be the answer, or a carefully drawn will might suffice.
  9. #9
    tranquility is offline Senior Member
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    Again, you need to think of your destination rather than the vehicle to get you there. You need to sit down with an attorney experienced in these matters. He will ask many questions and be quite intrusive to where you are, what your fears are and what you want to accomplish. What it seems like you want is clearly possible, but without knowing your situation I would only be guessing on how to get there.
  10. #10
    abezon is offline Senior Member
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    Ya know that phrase, "Penny wise & pound foolish?" You're about to trip over it. You have specific goals, a significant asset to deal with, & getting things wrong could result in either the wrong person getting the asset or the right people paying thousands in income taxes. Furthermore, you keep asking general questions instead of giving specific facts. A good estate lawyer is way cheaper than a badly designed do-it-yourself gifting plan.
    This post does not constitute legal advice, nor does it create an attorney-client relationship. Postings are based only on the information provided and you should consult an attorney in your area before relying on information contained in this post.

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