Comments on: Ask the taxgirl: “Buying” the family home at discount

By: Kelly

Kelly — Mon, 24 Nov 2008 22:15:47 +0000

Shannon,

You’re right. Gift tax can be complicated, especially now that the federal estate and gift tax system is bifurcated, which is why I didn’t mention the exemption. If there’s a gift tax issue, I highly recommend consulting with an attorney!

By: Shannon

Shannon — Mon, 24 Nov 2008 21:29:18 +0000

Taxgirl failed to mention the lifetime gift exemption. You can give up to $1,000,000 in gifts that exceed the annual limit, total, in your lifetime, before you start owing the gift tax. If you give $15,000 each to ten people in one year, for example, you’d use up $30,000 of your $1 million lifetime tax-free limit—ten times the $3,000 by which your $15,000 gifts exceeds the $12,000 per-person annual gift free amount.

I don’t know if this helps or not…

By: Ask the taxgirl: “Buying” the family home at discount | taxgirl | extensiveproperty.com

Thu, 20 Nov 2008 08:53:59 +0000

[...] See original here [...]

By: Kelly

Kelly — Thu, 20 Nov 2008 00:13:18 +0000

Nom Deplume,

Thanks for the suggestions. As you noted, there are a bunch of options that might be better than an outright discount sale but there really aren’t enough facts here to make a solid recommendation – for example, a periodic sale won’t get you much if the father’s health is poor (especially if there are siblings!). Lots to consider! That’s why the best advice is to consult a pro on this one.

By: Nom Deplume, J.D., LL.M.

Nom Deplume, J.D., LL.M. — Wed, 19 Nov 2008 23:30:53 +0000

Boy, you are nicer than I would have been (although I wouldn’t have “maule-ed” anyone.)

I am surprised that you did not suggest an installment sale with periodic forgiveness of each year’s installment. Or whether a sale of the future estate would lower the FMV. Or a combination of both.