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Anne, Master Tax Preparer
Category: Tax
Satisfied Customers: 2429
Experience:  Enrolled Agent with 25 Years Experience specializing Individual and Small Businesses
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If my wife and I add our sons name to the deed on our house

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If my wife and I add our son's name to the deed on our house in Prescott, AZ that we purchased last year in Prescott, AZ for $180,000 will we be subject to a GIFT TAX ?
HiCustomerbr />
Thank you for using justanswer. Yes, you will have to file a gift tax form if you add your son's name to your house, and his cost basis in the home will be the same as yours and your wife's if he should ever want to sell the house.

You and your wife will not have to report the first $26,000 that you and your wife "gift" to your son if you agree to "gift splitting" ($13,000 ea)

Although you will have to file the Form 709 United States Gift (and Generation-Skipping Transfer) Tax Return, you will not actually owe any tax. You and your wife each have a $3.5 million dollar lifetime exclusion before you will incur any tax liability on any gifts, but if you gift more than the yearly exclusion of $13000 ($26,000 if married filing jointly) then you will have to file the form to let the IRS know how much of your lifetime exclusion you have "used" . Please see below:

Publication 950 (9/2008), Introduction to Estate and Gift Taxes

Gift Tax

One other thing you might want to consider in the mix. Your house could be siezed to satisify any of your son's debts if you make him a part owner. (This is rare, and not a pleasant subject, but something you should at least know)

I hope this helps.

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