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TJ, Esq.
TJ, Esq., Attorney
Category: Legal
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Experience:  JD, MBA
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I need advice re: deed gifted by family member. He now wants it gifted back so he can borr

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I need advice re: deed gifted by family member. He now wants it gifted back so he can borrow against it for medical care. It is his primary residence. What are the tax implications? No money exchanged.. Thanks
Hello and thank you for allowing me the opportunity to assist you.

If the property is worth more than $5 million, then there could be gift tax implications. The donor pays gift taxes, not the recipient. But if the property is worth less than $5 million, then you would not likely need to worry about gift tax. There could be transfer taxes of a few hundred dollars to pay to the county. But even that assumes that the deeds back and forth were recorded. If not, then it's not really an issue.

Does that answer your question? Please let me know if you need clarification, as I am happy to continue helping you until you are satisfied. Also, your positive feedback is much appreciated. Thank you for using our service!

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Customer: replied 3 years ago.

Thanks, XXXXX XXXXX advisor mentioned gift tax, and my dad didn't pay any when he did it. I saw an article today stating that $33,000 was the trigger amount. Original sale was $54k, current value around $200k. I was uneasy when he did it and I am happy to give it back. A general counsel lawyer had advised him to do it in order to preserve it from Medicaid foreclosure, but there is no way he can get by the length of time needed (another four years) without depleting the equity. I was fearful that both he and I would have to pay gift taxes for a zero sum move, possibly at the stepped up value! I couldn't get a clear answer to confirm whether my finance guy or the lawyer was right until you responded. Thanks so much.

No problem. It sounds like you're okay as far as the gift tax is concerned. You may need to inform the IRS about it so they can keep track of your $5 million limit, but a tax would not need to be paid.

I wish you luck!
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