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Richard, Tax Attorney
Category: Tax
Satisfied Customers: 55297
Experience:  29 years of experience as a tax, real estate, and business attorney.
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I own two thirds of my parents house. I would like to give

Customer Question

I own two thirds of my parents house. I would like to give my sister one third. It is worth approximately $40,000. Would there be any gift tax involved?
JA: The accountant will know how to help. Please tell me more, so we can help you best.
Customer: What else would you need to know?
JA: Is there anything else the accountant should be aware of?
Customer: no
Submitted: 8 months ago.
Category: Tax
Expert:  Richard replied 8 months ago.

Hi! My name is Richard & I will be helping you today! It will take me a few minutes to type a response to your question. Thanks for your patience!

Expert:  Richard replied 8 months ago.

No....there would be no income or gift tax involved. Under Section 102 of the Internal Revenue Code, gifts are not income and thus are not included in the recipient's income. And, there will be no gift tax consequences. Recipients of gifts are not subject to gift tax. And, there should also be no gift tax due from the donor. Each donor can give $14,000 per year per person under the annual gift exclusion. In addition to that, for any amounts in excess of the $14,000 in a year, each person has a $5,450,000 lifetime exemption....which means a person can give a cumulative amount of up to $5,450,000 in gifts over and above the $14,000 annual gift exclusion amount without incurring gift tax....the donor must file a gift tax return to let the IRS know how much of the lifetime exemption is being used, but there will be no gift tax until cumulative additional gifts have exceeded the $5,450,000.

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Customer: replied 8 months ago.
Does this mean I can only give her 14,000 plus the 5,450? Half of my third would be 40,000
Expert:  Richard replied 8 months ago.

Not at all! You can give her the $14,000 a year under the annual exclusion amount. PLUS, over and above that you have a $5,450,000 life exemption which you can gift before you would owe any gift tax.

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