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I'm a NJ resident and planning to buy a condo in NYC. Condo…

I'm a NJ resident...

I'm a NJ resident and planning to buy a condo in NYC. Condo will be primarily used by my daughter. The condo has a tax abatement, but to get that lower tax, it needs to be owner occupied. I'm not moving my primary residence and will continue to live in my current home in NJ.

Accountant's Assistant: The Accountant will know how to help. Is there anything else the Accountant should be aware of?

I have 3 options:

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Customer reply replied 1 month ago
1: buy condo in daughter's name. Would trigger gift tax?? in which case, would it be resolved by filing IRS form 709 -- where i can declare the amount given to my daughter - so it'll be deducted from my estate allowance upon my death
#2: buy condo in my name .. but add daughter's name as well to the title. She can claim the condo as her primary residence and get tax abatement. I'll be a co-owner and a secondary residence for me. She will pay the monthly condo taxes and HOA fees. I have nothing new to file in my tax return?? as as per new law i'm beyond the $10k threshold for SALT.Are there any NJ or NYC tax implications with either of these options?Any other way I can do this w/o additional tax burden, while my daughter can still get the tax abatement.
Answered in 16 hours by:
3/15/2018
Stephen G.
Stephen G., Sr Income Tax Expert
Category: Tax
Satisfied Customers: 7,407
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Not sure what you consider the "3rd Option".

Under either Option 1 or 2 that you describe, you will have a Form 709 filing requirement either for the full value of the Condo (Option 1) or 50% of the Value of the Condo (Option 2).

The only other options that come to mind is to gift or loan the $ to your daughter so she can buy the Condo herself.

There should be no other tax implications to you, beyond any gift tax return filings (unless it was a loan with no gift tax return filing requirements).

In the case of a loan, the idea being that you could gift portions of the loan over time to keep the gifts under the annual exclusion amounts.

Steve G.

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Customer reply replied 1 month ago
Steve - Thank you for your response. Yes - i left out the #3 option (bit more complicated - establishing a trust, etc) ;I'm not doing the loan, instead -- keeping it simple as a straight gift.In which case, just to confirm....
1. filing form 709 is all I need to do??
2. Does the recipient (my daughter) need to file any other forms or any taxes she would owe??
3. Any NJ tax forms I need to file?
4. Any NJ taxes i'll owe?

Yes, that's all you need to do, ie. file a Federal Gift Tax return.

Your daughter does not have any income or gift tax to pay or any kind of filing requirements related to your gift.

There is no gift tax in New Jersey, therefore no gift tax return to file.

The only New Jersey issue is the Estate's tax as NJ only has a $675,000. estate tax exemption so that when lifetime taxable gifts (those in excess of the annual federal gift tax exclusion) plus the NJ taxable estate exceeds $675,000., there is a NJ estate tax due. However, this may change going forward as the NJ exemption may be brought more current. In any event there's nothing to be filed related to the gift at this point concerning NJ.

Also, I should mention that if you are married, your wife can "Join You" in the gift and that would double your annual federal exclusion amount, (30K vs. 15K) for the yearof the gift, no matter where the funds from the gift come from.

Let me know if I can assist you further.

Please remember to rate my response as that is the only way the SITE will credit me for assisting you today.

Thanks very much,

Steve G.

Stephen G.
Stephen G., Sr Income Tax Expert
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Customer reply replied 1 month ago
Stephen -- You mention a loan option. Can i do this:1. Add my daughter's name to my wife and my name -- so 3 parties on the deed (1/3 the purchase price is allocated to her)
2. We consider that to be an interest free loan -- and count $30k (exclusion for 2018), +$30k for 2019.. and so forth , until her share of full amount is fulfilled.In this case, I don't need to file any of the gift tax returns??
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