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Stephen G.
Stephen G., Sr Income Tax Expert
Category: Tax
Satisfied Customers: 6181
Experience:  Extensive Experience with Tax, Financial & Estate Issues
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I am an adult male of 45 years and I live my parents who are

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I am an adult male of 45 years and I live my parents who are 81 and 78 respectively. I pay all the bills but the upkeep of the home and property have become to much for them. My parents did a Quitclaim deed, signing the ownership of the property over to me. My parents and I plan on having them live here at the home until death. My concern however is the federal gift tax they may be charged or any income tax I may incur. We live in Massachusetts and the home at this time is valued at maybe $125,000.00. What do my parents and I need to be ready for when it comes tax obligations?

Stephen G. :

Hello, my name isXXXXX & I'll be helping you today. My goal is to give you a complete & accurate answer that you can understand.

Stephen G. :

Well, the good news is that there is no tax on this gift either for you or for your parents.

Stephen G. :

Your parents would be required to file a gift tax return on Form 709 (it is due when their income tax return is due) for 2013, in 2014.

Stephen G. :

There will not be any tax due.

Stephen G. :

At this point there is no gift tax until taxable lifetime gifts exceed $5,250,000., each.

Stephen G. :

There is no tax of any kind levied on you as the recipient of the gift.

Stephen G. :

If you need to contact me again with any tax or financial questions, you can just ask for "Steve G" at the beginning of your question. Thanks again for using us for your tax and financial questions. You may get a short survey from the site; if it isn't too much trouble I would appreciate it if you would answer it; the survey results are used to rate our performance;

Stephen G. :

Questions?

Customer:

Hi Stephen G. So if I understand you correctly, you are saying no tax payment of any kind on my parents as the Grantor's. Also for myself the Grantee no tax will be due, not considered income? Would that be due to them living in the home or is just the way it is?

Stephen G. :

No. It wouldn't matter where they live. In fact, since they haven't given up possession of the home as they still reside there, there's a question as to whether or not they have made a gift at all.

Stephen G. :

But that won't matter now

Stephen G. :

It's best to start the clock running on the transfer now in case they have to go to a nursing home and qualify for Medicaid.

Customer:

Aha because after all they are getting to live in a home rent free and maintenance free. About the transfer, it was done last week, thats why I had high urgency on this question. Thank you very much, I appreciate your timely response..

Stephen G. :

OK. you have nothing to worry about

Stephen G. :

Thanks for using JustAnswer.com

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