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Marvin,EA, Enrolled Agent
Category: Tax
Satisfied Customers: 1672
Experience:  Enrolled to Represent Taxpayers Before The IRS
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My daughter, who is married, is buying

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My daughter, who is married, is buying a "new" home from a bank which owns it because of a bankruptcy of the prior owner. The property is worth close to $900,000 and my daugter can buy it for $540,000. She has made the offer and it has been accepted. I wanted to pay $350,000 at closing; put my name on the Deed along with hers and her husband, and on my name on the Loan papers, so as to escape Gift Taxes. I would be a part owner making an investment in my future "retirement" home, and my daughter will live in the house to maintain it, until I need it. I now live in my own home which is fully paid for. They are concerned that if they now tell the bank that there is another person, me, who will also "own" the property, that the bank may consider this is like a "new" offer and may then consider the original agreed to contract is null and void, and allow someone else to offer a price higher than the $540,000 they offered, and they would "lose" this great home. I think they could ask the bank if the could add my name to the offer, and see if the bank would allow this without nullifying their original offer. My question, however, is this: Is there a way I can gift $350,000 to them without having to pay any gift taxes? Is there such a thing as a lifetime credit, whereby these funds would be applied to or subtracted from the maximum inherited value allowed when one dies. When I pass on, excluding the $350,000 gift/loan on the new house, my daughter would inherit about $600,000. I live in Texas; the house to be purchased is in Georgia. I am in a 2nd marriage. This $350,000 is coming from funds I inherited from my mother, and has not been co-mingled with the joint funds that my wife and I hold. Thank you,

Marvin,EA :

Hello and thanks you for using Just Answer. Every taxpayer is allowed exclusions from gift and estate tax before the tax is imposed. The gift tax exclusion is $1 million. A gift tax (Form 709) must be filed if a taxpayer makes any taxable gifts in the calendar year. Although tax is calculated on the return, no tax is due until the taxpayer exhausts the $1 million gift tax exclusion.

Marvin,EA :

If you give your daughter $350,000 as a gift you must file IRS Form (709) reporting the gift but no gift tax is due until you exhausts the $1 million gift tax exclusion.

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