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Barbara
Barbara, Enrolled Agent
Category: Tax
Satisfied Customers: 3020
Experience:  18+ years of experience in tax preparation; 25+ years of experience as a real estate/corporate paralegal.
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I am selling my home and want to give a friend $68,000, he

Customer Question

I am selling my home and want to give a friend $68,000, he helped me with expenses while he was living here. How
Much tax would I have to
Pay?
Submitted: 1 year ago.
Category: Tax
Expert:  Barbara replied 1 year ago.
Welcome to Just Answer. My name is ***** ***** it will be my pleasure to assist you with your tax question today.
If you are considering the $68,000 as a gift to your friend, neither you nor your friend will owe any taxes on the gift. You will, however, have a REPORTING requirement to document the gift because it is more than $14,000. You would use Form 709 to report the gift.
The following link contains Form 709 and its instructions:
http://www.irs.gov/uac/Form-709,-United-States-Gift-(and-Generation-Skipping-Transfer)-Tax-Return
Please let me know if you require further information or clarification.
Thank you and best regards,
Barb
Customer: replied 1 year ago.
Lol, I knew the answer I received, I was really looking for an answer yo
My question, such as x% or taxed as income, etc. I am not satisfied
Expert:  Barbara replied 1 year ago.
I apologize if you already knew the answer I provided, however, I would have no way of knowing what you know or do not know.
You asked about the tax on the gift of $68,000 to your friend, and there is NO tax on a gift to your friend or you.
If you are asking about the tax on the sale of your home, that is a different issue. Please clarify specifically what you are asking.
However, when selling your primary residence, there is a sale of home exclusion on the gain for those taxpayers who have owned and lived in the home for 2 of the last 5 years immediately preceding the sale. The 2 years does not have to be consecutive. If you use the single filing status, the exclusion amount is $250,000. If you use the married filing jointly filing status, the exclusion amount is $500,000.
For example, if you purchased the home for $100,000 and sell it for $200,000, your gain would be $100,000, and no tax would be due.
Please let me know if I can assist you further.
Best regards,
Barb
Expert:  Barbara replied 1 year ago.
Just following up with you to see if you have any other questions or concerns. If so, please come back to me here, and I will be happy to assist you. If not, please take a moment to rate my answer since that is the only way I receive credit for answering you and alerts Just Answer to compensate me.
Best regards,
Barb