When is there a gift tax?

[Torellian]

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

I've done a bit of research into this matter by way of google and have come up with vastly different answers. I've heard that gift tax is due if someone gives someone else something costing $12,000 or more. But another person said that if a parent Quit Claim deeds their half of a home to a child who is a joint tenant on the title, then there is no gift tax as long as the quit-claimed amount is under 1 million dollars. Which one is true?

 

[FlyingRon]

You have to report gifts over $12,000. However there is a lifetime exclusion for a million dollars worth of reported gifts. This is where you're seeing the confuse. Doesn't matter whether it's jointly owned or not.

But before that parents quit claims anything, they should consult with an advisor. That transfer could end up screwing their medicaid eligibility and could be ill-advised for other reasons. Better to let kids inherit things rather than giving it in most cases.

 

[HappyWanderer]

The internet is always true. Google tells me the government wants a tax return if the amount is over $12,000 and you don't have to pay taxes on that return if you haven't reported a million dollars yet.

The internet is the greates tool ever. Why to people talk with people for advice any more?

 

[Torellian]

You have to report gifts over $12,000. However there is a lifetime exclusion for a million dollars worth of reported gifts. This is where you're seeing the confuse. Doesn't matter whether it's jointly owned or not.

But before that parents quit claims anything, they should consult with an advisor. That transfer could end up screwing their medicaid eligibility and could be ill-advised for other reasons. Better to let kids inherit things rather than giving it in most cases.

When I do the QC deed, I also have to fill out an electronic Wisconsin Real Estate Transfer return where at one point it asks me to describe the transaction. I filled in: "Transfer in satisfaction of private loan". I don't know if that helps cover me or not. Are you familiar with this? Here's the link to the form: https://ww2.revenue.wi.gov/GenericFile/application?interview=1127322

Also, an attorney advised me that after doing the QC deed, I write up a statement to have my dad sign that states the reason for having both of our names on the deed as joint-tenants (for reasons of convenience of a simple transfer to my dad if I had become deceased prior to paying off the loan to my dad). He said that should cover me from the 5 year Medicaid lookback period. Is this correct?

I've been advised to do something called a Contract for Deed. If I want to go about doing a Contract for Deed, where do I get the form? I've been able to print out all the other kinds of forms for free online, but not the CFD form. I only come across vendors that want money for them. Is this something that could be made in pretty much any form myself?

 

[HappyWanderer]

An ATTORNEY advised you to commit fraud? Are you sure?

Go back to him and ask him to perform services for money. I'm either missing something here or you misunderstood or the attorney is a crook. First you talk of gift and now you talk of loan and then you talk of medicaid lookback and end up at contract for deed. I don't know much of anything of any of those. I do know **** from Shinola and you aren't polishing shoes.

 

[Torellian]

An ATTORNEY advised you to commit fraud? Are you sure?

Go back to him and ask him to perform services for money. I'm either missing something here or you misunderstood or the attorney is a crook. First you talk of gift and now you talk of loan and then you talk of medicaid lookback and end up at contract for deed. I don't know much of anything of any of those. I do know **** from Shinola and you aren't polishing shoes.

Sorry I didn't make myself clear. Someone ONLINE recommended the Contract for Deed. Everything else was recommended by the attorney (the QC deed and the written statement about why we have our names on the title as joint-tenants)