I gave my small store as a gift to my son, How can I show in tax return?

Question

I file schedule C and dont know how to show this transaction. The way I think that it is just change of ownership. Please advise
Thanx

Answer 1

The value of the gift is the net value of all of the business assets. If this is greater than $12,000, you have to report and pay gift taxes on it. You would file a final Schedule C for the year in which the gift is made and the Schedule C would only cover the income and expenses from the beginning of the year to the date the gift is made.

Answer 2

You need to file a gift tax return if the value of the gift was more than $12,000. You may have to pay a gift tax. Gifts are never taxed to the recipient.

As far as Schedule C goes, you only claim the income and expenses attributable to you prior to the sale. Your son picks up on his return from the date of transfer.

I would suggest that you consult with a CPA or tax attorney. The gift tax rules are complex. A mistake could cost you a lot of money and grief.

Answer 3

Was the store a building? a business operation? Was there inventory? You left too much out of the question.