I received a "one time" gift of commercial property from my Dad.I sold it. Do I have to pay Capital Gains??

Answer 1

You may have both capital gains and ordinary income taxes to pay. I am going to assume there was no gift tax paid, and that your father's adjusted basis in the property was more than you sold it for. I am also assuming that you sold it right after you were given it.

In this case, you figure the sale based on the adjusted basis of the property in the hands of your father. If your father took (or was allowed to take) depreciation on the property, that depreciation is recaptured and you pay ordinary income tax on that amount. Any gain over that amount is taxed as long-term capital gain, assuming your father had the property for more than one year.

What is happening is that the sale of the property in your hands is treated the same as if it were still in your father's hands. This is to deter an obvious tax avoidance strategy, of just giving away something which is going to be taxed when it is sold.

For more details, see the IRS Publication 551 Basis of Assets

http://www.irs.gov/publications/p551/ar02.html

Answer 2

there are many questions?
When you say gift do you mean during life or at death?
if at death u get a new basis and may not have to pay that much tax.
there are people talking about depreciation and recapture this is only relevant if there is something on this property, buildings, or something like that.

It is very unlikely that gift tax was paid on it unless he has given over 1 million of gifts before this gift to you. (different if given at death).

you pay a capital gain on the difference between your father's adjusted basis and sale price if the property was held for over 1 year. there are different rules for losses.
Totally different if he gave u the busines that is on this property.

Answer 3

In short yes, if you made a profit. Although your dad may have reported this on Form 709 (Gift Tax) at the fair value of the gift, your basis in the property would be a carryover of his basis. (See IRC 1015; 26 CFR 1015). The carryover basis would be adjusted for any gift tax paid and any improvements you made. The basis would be adjusted for any depreciation allowed or allowable. (If you didn't take depreciation you'd better go back and amend prior returns; it is allowed (you took the deduction, or allowable (you did not take the deduction or did not take the proper amount)

Answer 4

Yes, if you had a gain. Since it was given to you as a gift, your basis to determine gain or loss would be whatever your dad's basis was, plus any eligible expenses you had after that like improvements or selling costs.

Answer 5

yes - your dad should have paid gift tax when you received it, and set the basis - your profit is the difference between that basis and what you received, less selling and any money you put it into improvements.

Answer 6

It would depend on how much money you recieved, but more than likely, yes.

Answer 7

If you made a profit your do.