$50k,when he sold his house, do I need to pay taxes on this or is that totally his responsibility when he sold the house?
2007-04-20 02:56:06 · 8 answers · asked by momof3 5 in Business & Finance ➔ Taxes ➔ United States
We are not avoiding taxes, I just want to know if I am legally responsible to do anything except to spend it of course!! lol --Paying taxes since I was 15!!
2007-04-20 03:10:56 · update #1
The $50k is not taxable to you. It would have been taxable to your father if it was gain not covered by home owner's exclusion and he would be required to file a IRS form 709 for any gift to a single person greater than $12k. But that was really nice of your father to make that gift.
2007-04-20 03:09:24 · answer #1 · answered by ? 6 · 0⤊ 2⤋
You have multiple issues here.
1) Gifts are not taxable to the receiver. If the gift is over $12k, a gift tax return needs to be filed by the giver but, chances are, no gift taxes would be owed.
2) If he lived in the home 2 of the 5 years before he sold it, the first $250k in profit would be tax free. If this is from a second home or rental property, he would owe taxes on the profit. You can not avoid the taxes be giving the money away.
2007-04-20 10:08:00 · answer #2 · answered by Wayne Z 7 · 3⤊ 0⤋
You needn't do anything. Gifts are taxed to the donor, not the recipient.
Your father may have to pay a Gift Tax on that money, however. There is a $12,000 annual exclusion per recipient. There is also a lifetime exclusion of $1 million but that reduces the Estate Tax exclusion dollar for dollar.
Any Gift Tax would be over and above any capital gains tax he had to pay, if any.
2007-04-20 10:24:51 · answer #3 · answered by Bostonian In MO 7 · 3⤊ 0⤋
It's called "gift tax". The person who gives the gift is responsible to pay the taxes on it BUT your father may not have to pay the taxes on it at all. In a lifetime people are allowed to give $1,000,000 tax free. Your father can claim this is part of that allowance. It wouldn't be a tax he would have to pay right away either. He would have to file a special form when he does his annual taxes.
2007-04-20 10:10:50 · answer #4 · answered by ladyluck 5 · 0⤊ 0⤋
On that amount, he'd be required to file a gift tax return. He would probably not owe any gift tax on the gift, though.
If there is a gift tax, your dad would be responsible for it, not you.
The gift tax return, and possible gift tax, is separate from his income tax return, and any capital gains amount he reported on a schedule D. If he was eligible to exclude his gain, he wouldn't have had to report the sale.
2007-04-20 10:40:20 · answer #5 · answered by Judy 7 · 2⤊ 1⤋
You've got to pay the taxes on it. It sounds like double taxing but it's not. It completely legal. So I'd make sure you keep that in mind when tax time comes around next year.
2007-04-20 10:13:35 · answer #6 · answered by Anonymous · 0⤊ 5⤋
yes
2007-04-20 10:00:10 · answer #7 · answered by tweedyberd 1 · 0⤊ 5⤋
No, he should do that
2007-04-20 10:02:34 · answer #8 · answered by Elie F 1 · 0⤊ 2⤋