At my age I wanted to make sure that everything was taken care of prior to my death so I gave one of my sons my Mobile Home and moved into an apartment. Is it possible for me to receive credit for giving the mobile home away rather then selling it?
2006-08-02 01:30:09 · 10 answers · asked by AL 6 in Business & Finance ➔ Taxes ➔ United States
a gift is only tax deductible is it is made to a charity. further, if the value is above the staturory limit, your son will have to pay taxes on a part of the gift.
2006-08-02 01:34:42 · answer #1 · answered by Homer J. Simpson 6 · 0⤊ 1⤋
I don't see how you would get any more exemptions for that.
You probably mean deduction, but I don't see where you qualify for that either. You son is not likely a non-profit, tax-exempt organization, so under charity laws, no dice.
You have gift laws to consider if the value of the mobile home exceeds a certain amount - see tax advisor for details.
And being that it is a home with value, your son has some paperwork to do as well since he is gaining a large (again, the fair market value) asset.
But as for a deduction, I don't see how giving him $5 for gas money or a mobile home is going to help you with a tax "credit".
I noticed the early responded said simply, "Yes", but I'm not aware of why they wrote that.
2006-08-02 01:36:08 · answer #2 · answered by dm_dragons 5 · 0⤊ 0⤋
The only thing is that he then becomes liable for tax if it is over a certain amount in value... I would check into gift tax. And no, there is no credit for giving it to a relative.
The following are generally excluded from gift tax:
1. Gifts to one's spouse.
2. Gifts to a political organization for use by the political organization.
3. Gifts that are valued at less than the annual gift tax exclusion for a given year.
4. Medical and educational expenses - payments made by a donor to a person or organization such as a college, doctor or hospital.
As the regulations applied to gift taxes are very complicated, it is best to check with your respective tax authorities if you have given anyone a gift valued at more than $10,000.
2006-08-02 01:34:43 · answer #3 · answered by Robb 5 · 0⤊ 0⤋
First, an exemption is an amount of income that the IRS exempts from income tax (hence the name "exemption") based on the number of qualified people in a household. The gift to your son does not affect the number of exemptions you may take on your tax return. You're probably thinking of the concept of a deduction. A taxpayer may deduct certain expenses from gross income and, as a result, pay a lower tax on income.
For income tax purposes, a gift to your son is not deductible. Congress must expressly allow a deduction in the tax code for it to apply, and they have not in this case. [Note: some gifts qualify as charitable deductions and are allowed as an itemized deduction, but that doesn't seem to be your situation.]
Conversely, the gift is not considered income to your son (Section 102 of the federal tax code); he will owe no income tax on his new wealth. However, he does assume your tax basis on the date of the gift. He will need that information if he ever sells the property.
Besides the income tax implications of the gift, let me also briefly discuss the gift tax implications to you. First, the donor (you in this case) is the one responsible for gift tax; the recipient (your son in this case) is not. For 2006, the annual exclusion for gifts is $12,000 per person. In other words, you may give up to $12,000 in money, property, etc. to each of as many people as you choose without reporting it to the IRS.
Once the gift to any one individual goes above $12,000 in value, you generally need to file a gift tax return. However, filing a return does not mean the donor actually owes any tax. A person currently may give away during his or her lifetime $1,000,000 as gifts and through the passing of one's estate without owing tax. This is known as the unified credit. In your situation, this means you don't file a gift return unless the home is worth more than $12,000, and you won't owe taxes unless you've used all of your unified credit amount already.
Check with a tax advisor for help in determining whether to file a gift tax return, or go to the IRS website (www.irs.gov) if you feel like figuring it out for yourself.
2006-08-04 17:22:22 · answer #4 · answered by Friendly Neighbor 1 · 0⤊ 0⤋
No. Unless you gave it to a charity.
If you gave it to your son, you may be liable for a gift tax if the value of the gift (your house) exceeded $10,000. Furthermore, if you die (and I hope you don't) within the next few years, the value of the house may still be included in your estate for estate taxes.
If you want to transfer ownership, you must sell the house at fair market value. If your son, can not afford to buy it, sell it to him with seller financing. Your son should buy life insurance on you for the amount of the loan. He pays interest on the loan while you are living (which is tax deductible for him and taxable interest income for you) and when you die, the life insurance policy pays off (non-taxable) and your son can use the proceeds to pay off the loan on the house. That amount is included in your estate and subject to estate taxes.
2006-08-03 04:52:55 · answer #5 · answered by Anonymous · 0⤊ 0⤋
Yes it is, but your son will be responsible for paying a windfall tax on the gift.
2006-08-02 01:32:41 · answer #6 · answered by Stuart 7 · 0⤊ 0⤋
depends on whichh country you are in. Most countries allow for donations to be tax deductable
2006-08-02 01:34:47 · answer #7 · answered by Kalahari_Surfer 5 · 0⤊ 0⤋
why bother it cant be worth more than 4 or 5/k
2006-08-02 01:34:03 · answer #8 · answered by Anonymous · 0⤊ 0⤋
yes
2006-08-02 01:32:00 · answer #9 · answered by Pvt. Andrew Malone 5 · 0⤊ 0⤋
Unfortunately...not in the US.
2006-08-02 02:28:16 · answer #10 · answered by 3eleven 4 · 0⤊ 0⤋