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Robin D.
Robin D., Senior Tax Advisor 4
Category: Tax
Satisfied Customers: 15711
Experience:  15years with H & R Block. Divisional leader, Instructor
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My Dad left me his house as sole owner which is now sold. I

Customer Question

My Dad left me his house as sole owner which is now sold. I need to know if I give my brother and sisters $14000.00 do I have to pay taxes on the original amount I received for the house or just the money left after giving it away? Please help.
Submitted: 12 months ago.
Category: Tax
Expert:  Robin D. replied 12 months ago.

Hello, I'm Robin. Welcome to JustAnswer. I'm reviewing your question now and typing up my reply. I'll post that in just a few moments.

Expert:  Robin D. replied 12 months ago.

If your father left you his house and you sold it then you would be required to report the sale but you would only pay tax on the gain. Gain is the difference in COST and Sale price (less costs to sale).

Because you were left the house (inherited it) your cost is the Fair Market Value of the house on the date your father passed away. You may not have any gain but you still have to report the sale.

If you give away $14000 to each of your siblings you still have to show all the sale on your own return and the gifts do not change that.

Please let me know if you need clarification. If you do not then a positive 5 star rating is appreciated so I get credit for the response. (look for the STARS or SMILEY FACES)

Customer: replied 12 months ago.
I just need to know if I should gift the money before or after filing taxes for this year.
Expert:  Robin D. replied 12 months ago.

Your gift counts in the year you make the gift but it does not matter for your tax filing because you are not required to report the gift and it does not change your tax situation.

You can give it before or after because it has no relevance at all for your taxes as long as you give them each only $14000 or less.

Customer: replied 12 months ago.
Sorry one more try, say I have $170.000 and I gift $70.00 do I pay taxes on $170.000 or $100.000
Expert:  Robin D. replied 12 months ago.

You would pay tax on the $170,000.

Expert:  Robin D. replied 12 months ago.

The gifts are not deductible in any way. You will pay the full tax (if there is any) because you owned the house and you sold the house.

Did that clarify?

Please make sure you know how to calculate the true gain because you only pay tax if there is a gain.

Expert:  Robin D. replied 12 months ago.

I wanted to check back and see if you needed further clarification.