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jgordosea, Enrolled Agent
Category: Capital Gains and Losses
Satisfied Customers: 3161
Experience:  As an Enrolled Agent you can be ensured of my competence in income tax matters.
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I inherited a portion of a farm in VA in 2000 and sold my interest

Customer Question

I inherited a portion of a farm in VA in 2000 and sold my interest or portion in 2015. I know I have to pay capital gains on the difference between my basis when I inherited and when I sold.
My question is, if I give some of the money as a gift to my children, does that lower my tax liability? For example, if my cap gain was 30,000 and I gift 10,000 does that mean my tax liability is 20,000?
Submitted: 2 years ago.
Category: Capital Gains and Losses
Expert:  jgordosea replied 2 years ago.


Although it surely would be wonderful to gift to your children giving the proceeds from the sale of property that you solely owned does not change your tax burden.

On the other hand if you give an interest in the property prior to the sale then the income will also be transferred and the child would report their portion of the sale.

Gifting to private parties is not a deduction from income but gifts to public charities or churches could be a deduction that could lower your income subject to tax.

Hope this helps as you look for how to lower your tax on the sale.

Please ask if you need more information or clarification.

Thank you.