Tax Foreclosure Houses For Sale
September 7th, 2007
Tax Foreclosure Houses For Sale
Question: Gift of Equity - do I need to fill out a Gift tax Return?
OK, my parents house was in foreclosure, so I bought it and got a mortgage on it. After a year and a half, they bought it back from me. Part of my sale to them was a "gift of equity" of about $48,000, so that they could obtain a mortgage. Do I need to report this "gift of equity", and if so how? From what I've read, it appears I need to file a gift tax return, but (since this is my first gift, I'm well under the $2,000,000 lifetime limit) I won't need to pay any tax on this. Am I correct in my understanding of this?
Thanks for responses to far! A couple of details for clarification:
1) The house was sold in March, at which time I was single. I was married later that year. Can I split the gift between me and my wife?
2) Technically, only my Mom bought the house, so am I still able to claim part of the gift went to my Dad?
3) Exactly what affect does any of this have on estate taxes (this is the first I've heard of this)?>
Answer: Since your gift was more than $12,000 to each of them, a Gift Tax return is required. The lifetime exclusion amount is $1,000,000 on gifts, not $2,000,000 as it is on estate taxes although it does reduce your estate tax exemption and may have tax consequences when you pass if you use it now to avoid gift taxes on the gift.
Addendum: If the facts at hand support a gift from both you and your wife to your mother and father you can divide it up 4 ways without dipping into your lifetime exclusion amount.
The exclusion amounts for gift taxes and estates are unified. the amounts are different, but using any portion of your unified exclusion for gift taxes will permanently reduce the exclusion available to your estate.
FORECLOSURE- 4BED/ 3BATH BRICK HOUSE ON 11.69 ACRES-4316 Pleasant Site Rd. Selmer, TN
>
If you're new here, you may want to subscribe to my RSS feed. Thanks for visiting!
Related posts
Posted in Tax Foreclosures | 
Tags: estate, Foreclosure Houses, homes, Houses For Sale, Houses Sale, housing, realestate, reference, Tax Foreclosure
Leave a Reply
 |
 |
 |
||
 |
 |
|
 |
||