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I receive $2,000 interest from property I sold in California

every month with a balloon...
I receive $2,000 interest from property I sold in California every month with a balloon payment of $240,000 in three years. I am 69 and live in Maine and wish to "gift" my son a one time gift of this property. My question is after legally transferring the property, will I have to pay tax or will he? I have read where I can give my son up to one million in my lifetime without paying tax as a gift. Also, what forms do I need to fill out when filing my income tax in April?
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Answered in 3 minutes by:
1/14/2013
Richard
Richard, Tax Attorney
Category: Tax
Satisfied Customers: 55,801
Experience: 29 years of experience as a tax, real estate, and business attorney.
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Welcome! My goal is to do my very best to understand your situation and to provide a full and complete answer for you.


Good afternoon. Yes, you can transfer the property to your son by gift. Once transferred, he will be entitled to the interest on the property and would need to report it on his income tax return.

With regard to the gift there should be no gift tax consequences. Each donor can give $14,000 per year per person under the annual gift exclusion. In addition to that, each person has a $5,000,000 lifetime exemption....which means a person can give a cumulative amount of up to $5,000,000 in gifts without incurring gift tax....the donor must file a gift tax return (FORM 709) to let the IRS know how much of the lifetime exemption is being used, but there will be no gift tax until cumulative gifts have exceeded the $5,000,000.




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Richard
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