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do i have to pay taxes on a home that my parents give me

I am going to recieve...
I am going to recieve a loan free home from my parents worth about $600,000, I plan to live in it and take some equity out of it. Do I have to pay gift or inheritence taxes
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Answered in 1 hour by:
7/23/2006
Zhicheng Lai
Zhicheng Lai, Enrolled Agent(EA)
Category: Tax
Satisfied Customers: 811
Experience: 5 years tax preparing experience
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Do you inherit the house or your parent gift the house to you? Is the house your primary residence? for how long?

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Jon Andrews
Jon Andrews, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 3,118
Experience: I deal with all levels of tax planning and controversy - from the ordinary to the complex.
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If they give it to you (during their lifetime), they will need to file a gift tax return reflecting the gift in excess of $12,000 each. They each have a $1,000,000 lifetime gift tax exemption, so there should not be any actual gift tax due - they just need to file the return.


The gift is not reportable by you in any way and there is no tax liability to you connected with this gift. Your basis (when you get ready to sell it) will be whatever their cost basis was at the time of the gift PLUS the cost of any improvements that you make after the gift.


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Jon Andrews
Jon Andrews, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 3,118
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