Have a Tax Question? Ask a Tax Expert
How much is the building lot worth?
Many people have heard that you cannot give more than $12,000 in one year's time as a gift to any one individual before it becomes taxable, however, that is not the case. The actual IRS requirement is that if you give a gift of more than $12,000 in any one year to any one individual, you must report the gift on Form 709. Gifts less than $12,000 in value do not need to be reported.
However, under the Unified Tax Credit, each individual is allowed a lifetime exemption on the value of gifts that can be given. That lifetime exemption amount is currently set at $1 million. So if the value of the gift does not exceed $1 million, then no gift tax will be due. Your father would apply his lifetime exemption amount of $1 million against the value of the gift he is now giving you. If the gift is valued at say $200,000, then he would still have another $800,000 he can use towards his lifetime exemption on any future gifts.
So your father will be required to file the Form 709 to report the gift, but no gift tax will be due if he has not already used up his lifetime exemption amount of $1 million.
If this answer was helpful please press the Accept button. Positive feedback is also appreciated.
Thank you and let me know if you have more questions.
Your father will also file form CT-709 for the state of Connecticut to report the value of the gift given. But the state of Connecticut allows the same exemption amounts as the IRS, so again no tax will be due.