S
stanley
Guest
my father bought me a house in 1994 (in Florida). he paid 200k. i have rented it from him since that time. i am now buying it from him. the appraised value and purchase price is 300k. i need to purchase it from him for this price (for mortgage qualification purposes). i am going to use "gift equity" of $100k and have a mortgage of $200k.
I know this triggers gift of $100k but that is no problem as he will never reach his unified credit (so no gift tax will ever be due).
my concern is capital gains tax. will he pay cap gains tax on the appreciation of $100k (assuming his basis is $200k and sale price of $300k. or, does the gift equity avoid that issue and we can treat as a partial gift and have me step into his basis and then me carry the gain (like what happens on a complete gift of appreciated real property). this doesnt bother me as i will live in house for many years and have a personal exemption i'll use one day.
thanks.
I know this triggers gift of $100k but that is no problem as he will never reach his unified credit (so no gift tax will ever be due).
my concern is capital gains tax. will he pay cap gains tax on the appreciation of $100k (assuming his basis is $200k and sale price of $300k. or, does the gift equity avoid that issue and we can treat as a partial gift and have me step into his basis and then me carry the gain (like what happens on a complete gift of appreciated real property). this doesnt bother me as i will live in house for many years and have a personal exemption i'll use one day.
thanks.