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Lev
Lev, Tax Advisor
Category: Tax
Satisfied Customers: 28084
Experience:  Taxes, Immigration, Labor Relations
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My husband and I purchased a home under a VA loan into 2011

Customer Question

My husband and I purchased a home under a VA loan into 2011 . my son and his family has been living in it and paying the mortgage the last three years -- he is eligible to assume the mortgage but -- we purchase the home on a short sale for 200,000 if he assumes the loan which he is able to do ---the home is estimate at 400,000 my question is will my husband and I be taxed for The 200,000 as a gift tax or capital gain of 37% -- it's cleaned as a rental -- How can we turn the home over to him
Submitted: 6 months ago.
Category: Tax
Expert:  Lev replied 6 months ago.

You may either sell OR gift the property to your son - or a combination of both.

If you gift....

In the US - gift - is not taxable income for the recipient and you do not need to be reported to the IRS.

There is no any amount limit.

Please see for reference IRS publication 525 page 31 left column - -

http://www.irs.gov/pub/irs-pdf/p525.pdf

Gifts and inheritances. In most cases, property you receive as a gift, bequest, or inheritance is not included in your income.....

- while the gift itself is not a taxable income for the donee and is NOT reported on the tax return

- the donor might be required to file a gift tax return (form 709) when the gift is above filing threshold ($14,000 per person per year)

- but most likely - you will not have any gift tax liability (based on the lifetime exclusion that is above $5,450,000).

Let me know if you need any clarification this matter.

Expert:  Lev replied 6 months ago.

So far ...

- while the gift itself is not a taxable income for the donee and is NOT reported on the tax return

- the donor might be required to file a gift tax return (form 709) when the gift is above filing threshold ($14,000 per person per year)

- but most likely - you will not have any gift tax liability (based on the lifetime exclusion that is above $5,450,000).

Let me know if you need any clarification this matter.

.

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