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Gifting Taxes

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Ryan Said:

I am buying my Parents House From them. They Are Gifting me the Equity do I have to pay taxes on that?

We Answered:

They have to fill out 2 form 709s but if they have made no previous gifts, they won't actually have to get out their checkbooks as they get a $1,000,000 lifetime exclusion each.

In theory, you would pay the tax when you sell at a gain, but in reality when you finance, the bank is going to issue a 1099-S for the FMV and your parents will show the sale on their tax return, but not pay tax on the $60,000 due to the sale of home exclusion. (The bank treats the gift as cash and then you use the cash to buy the house.)

Holly Said:

Gifting issues, taxes on funds transferred abroad?

We Answered:

You can gift your parents $12,000 each in a year. But if you treat the money as your own after gifting, you are evading income tax on the interest.

Laurie Said:

How do gift taxes work if a Swiss relative wants to give us money?

We Answered:

Ignore the first response, she doesn't know what she's talking about.

Gift Taxes are paid by the donor, not the recipient. You will NOT pay any income tax on the gift, nor will YOU pay any Gift Tax.

The donor may have to pay a Gift Tax depending upon the amount and timing of the gift and their lifetime gifting history. When the gift comes from a foreign donor the rules get complex but that's the donor's problem, not yours.

Generally a foreign donor cannot be compelled to pay the US Gift Tax but there may be tax treaties that affect that. (There is one between the US and the UK that does address the issue though I don't know about any Swiss tax treaty that does.)

Kimberly Said:

up to what amount would a person have to file taxes on a cash gift from another individual?

We Answered:

Gifts "can be" deductible to the giver. IF THEY CLAIM IT FOR TAX PURPOSES, then it is income to you, and yo must claim it as "other income". Check with the donor! If they're not claiming it, then you can safely ignore it. Your Ad Here

Discuss It!

replica watches said:

Ignore the first response, she doesn't know what she's talking about.