Comments on: Ask the Taxgirl: Taxable Gifts http://www.taxgirl.com/ask-the-taxgirl-taxable-gifts/ Paying taxes is painful... but reading about them shouldn't be. Sun, 22 Nov 2009 00:42:26 -0500 http://wordpress.org/?v=2.8.6 hourly 1 By: Santiago http://www.taxgirl.com/ask-the-taxgirl-taxable-gifts/comment-page-1/#comment-10784 Santiago Fri, 26 Jun 2009 06:42:57 +0000 http://taxgirl.com/?p=235#comment-10784 I want to give my mom my car that's worth about $10,000 Private Party Price (not retail price or trade in value price). What do I do in my taxes next year for this 2009 year? Do I claim it as a gift? Does she have to put it on her taxes too? Or perhaps I should sell it to her for $1? I live in California and she lives in Oregon. Thank you! I want to give my mom my car that’s worth about $10,000 Private Party Price (not retail price or trade in value price). What do I do in my taxes next year for this 2009 year? Do I claim it as a gift? Does she have to put it on her taxes too? Or perhaps I should sell it to her for $1? I live in California and she lives in Oregon. Thank you!

]]> By: Kelly http://www.taxgirl.com/ask-the-taxgirl-taxable-gifts/comment-page-1/#comment-10224 Kelly Fri, 24 Apr 2009 11:04:49 +0000 http://taxgirl.com/?p=235#comment-10224 A gift is a gift. If you put your mom on the title, still a gift, as the obligation was yours. Even worse, unless she's actually buying in, you're gifting half of the property to her and she's gifting you $100,000. If it's a loan, you must pay her interest equal to what would be expected in a bona fide transaction (in other words, a real loan) - that would be income to her. You must pay her back the $100,000 or it's a gift. All of that said, depending on your mom's other circumstances, there may be no real estate or gift tax consequences to her. Of course, if she's in a financial position to give you that much money, I'm guess there might be circumstances that deserve a second look. I highly recommend consulting with a tax pro before your mom hands over the cash. A gift is a gift.

If you put your mom on the title, still a gift, as the obligation was yours. Even worse, unless she’s actually buying in, you’re gifting half of the property to her and she’s gifting you $100,000.

If it’s a loan, you must pay her interest equal to what would be expected in a bona fide transaction (in other words, a real loan) – that would be income to her. You must pay her back the $100,000 or it’s a gift.

All of that said, depending on your mom’s other circumstances, there may be no real estate or gift tax consequences to her. Of course, if she’s in a financial position to give you that much money, I’m guess there might be circumstances that deserve a second look. I highly recommend consulting with a tax pro before your mom hands over the cash.

]]> By: juli flibbert http://www.taxgirl.com/ask-the-taxgirl-taxable-gifts/comment-page-1/#comment-10220 juli flibbert Thu, 23 Apr 2009 17:46:47 +0000 http://taxgirl.com/?p=235#comment-10220 My Mom wants to give me 100,000 to pay down my mortgage. Can we say this is a loan? Should I put her on title? I want to avoid the tax penalty. thanks! My Mom wants to give me 100,000 to pay down my mortgage. Can we say this is a loan? Should I put her on title? I want to avoid the tax penalty. thanks!

]]> By: Thomas http://www.taxgirl.com/ask-the-taxgirl-taxable-gifts/comment-page-1/#comment-8954 Thomas Tue, 17 Feb 2009 20:10:29 +0000 http://taxgirl.com/?p=235#comment-8954 Whether the other family member incurs gift tax is immaterial. IRS follows a "step transaction" audit process. By that, the SUBSTANCE overides the FORM of the transaction. Regardless of the step inserted in the middle, the substance -- what really happened here - of this transaction is that the family member created a process to transfer more than $12,000 to you via a series of gifts. IRS will treat it as a single step. Suggestion: Give some in this tax year and the balance in 2010. Or, gift the full amount and use the excess over $12,000 (actually, it's $13,000 for 2009) against his/her $1 million lifetime exemption. Whether the other family member incurs gift tax is immaterial. IRS follows a “step transaction” audit process. By that, the SUBSTANCE overides the FORM of the transaction. Regardless of the step inserted in the middle, the substance — what really happened here – of this transaction is that the family member created a process to transfer more than $12,000 to you via a series of gifts. IRS will treat it as a single step. Suggestion: Give some in this tax year and the balance in 2010. Or, gift the full amount and use the excess over $12,000 (actually, it’s $13,000 for 2009) against his/her $1 million lifetime exemption.

]]> By: sd http://www.taxgirl.com/ask-the-taxgirl-taxable-gifts/comment-page-1/#comment-927 sd Sat, 26 Jul 2008 18:57:11 +0000 http://taxgirl.com/?p=235#comment-927 Hi, A family member wants to give me more than $12,000. To avoid the gift tax, she wants to give the amount over $12,000 to another family member, who will then "gift" that amount to me. Does this cause any exposure to taxes for the parties involved? Hi,
A family member wants to give me more than $12,000. To avoid the gift tax, she wants to give the amount over $12,000 to another family member, who will then “gift” that amount to me. Does this cause any exposure to taxes for the parties involved?

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