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What are the tax implications when you give some of your ownership in an LLC to another person? Is there a gift tax that has to be paid?

Submitted: 103 days and 19 hours ago.

Category: Tax

Value: $15

Status: CLOSED

Posted by LEV 103 days and 19 hours ago.

Answer

Gift is an income, but not taxable income. Please see IRS publication 525 page 33 for reference - http://www.irs.gov/pub/irs-pdf/p525.pdf
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So - the recipient does not need to claim it on his/her tax return and does not owe any taxes.

The donor - may need to file a gift tax return if the gift amount is above $13,000 per person per year (for 2009) , but there would not be any gift tax unless the lifetime limit of $1,000,000 is reached.
The gift in form of payment directly to educational or medical facility - is not included into $13,000 limit.

Let me know if you need any help with reporting.

103 days and 18 hours ago.

Reply

So transfer of ownership in an LLC is considered a gift?

Accepted Answer

As long as you do not receive anything in exchange - yes - that would be a gift.
If you receive the money or any other property in exchange - that would be the sale.

Accepts:
Expert:	LEV
Pos. Feedback:	99.3 %
Answered:	8/10/2009

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