Help Gift Transaction

[jchiujob]

What is the name of your state (only U.S. law)? New York

My parents have an apartment in New York and the deed is under my brother and sister and me. My brother want to buy me and my sister out. He want to do as gift transaction. Do I have to pay any Gift Transaction IRS Tax? According my knowledge correct me if I am wrong I think I have to pay about 40% of the gift transaction IRS tax. If you sell the property as capital gain I have to pay about 30% of IRS tax.

 

[FlyingRon]

If he is paying you close to market price it is NOT a gift. I assume he's trying to dodge some local tax issue by lying and calling it a gift. This isn't the "how do I defraud the government" forum. We can not advise you how to do this.

There's no 40% gift transaction tax. Any gift of more than the exclusion amount ($14,000) needs to be reported to the IRS. However, until your aggregate gifts over lifetime are in the multiple millions of dollars there is no tax issue with the IRS.

If you sell the property, then anything you get over the basis IS a capital gain. Long term capital gains are nowhere near 30% (it varies with your income but doesn't even exceed 15% until your income is over $413,000 for example. Then it goes up to 20%).

How did you and your siblings come to own this property? Was it gifted to you? Are you living there as your principal residence now?