My mom will give me her house with about 50k in equity already. If she files the form 709 with IRS to show the gift to me, will she pay the tax or will I pay the tax? I know she's the one who will file but who actually pays?
2007-06-08 10:50:03 · 7 answers · asked by s c 1 in Business & Finance ➔ Taxes ➔ United States
The gift tax is imposed on the donor. There is an annual $12,000 per donee exclusion, and a lifetime $1 million exclusion so it is likely there is no gift tax on this transfer but your mother still is required to file the return. It's due April 15th the year after the gift is made. If there is a gift tax owed and your mother does not pay it, the IRS will have a lien on the property for the amount of the gift tax.
You also need to check with your state to see if there is a transfer tax in the state.
In addition you need to be careful of an estate tax trap. If your mother continues to live in he house for the rest of her life, the IRS will treat this as a transfer with a reservation of a life estate and include the full fair market value of the property in your mother's taxable estate. There is a $2 million exclusion at the moment but the trap is something you need to be aware of just in case.
2007-06-10 14:38:06 · answer #1 · answered by Chessman 2 · 0⤊ 0⤋
The filing deadline for 2013 gifts is April 15, 2014, the same date as your income tax return will be due. You don't file these together, they are separate returns. If the recipient is married, you can give each spouse $10k and dispense with filing Form 709 entirely as the $14,000 annual exclusion is per recipient to an unlimited number of recipients. FYI, the unified credit for 2013 is $5,250,000. The $1,000,000 is non longer in effect. It was increased to $5,000,000 in 2011 and is now indexed to inflation. (You can thank Obama for that one -- he pushed the change through.)
2016-04-01 11:10:30 · answer #2 · answered by Anonymous · 0⤊ 0⤋
she would but only after she has given away 1 million dollars in her life. Therefore if hehr house has only 50K in equity it is very unlikely that you will have to deal with this.
2007-06-08 11:46:12 · answer #3 · answered by ainger452 3 · 0⤊ 0⤋
She will. (Unless you give her the money.) Gift tax is covering people who would give away their stuff instead of making it part of their estate where estate taxes have to be paid. It goes on her lifetime limits.
2007-06-08 10:53:48 · answer #4 · answered by Mike1942f 7 · 0⤊ 0⤋
If any tax is due, she would be the one to pay it.
If she uses her lifetime amount for this gift, if she hasn't used it already, then there might not be any tax due.
2007-06-11 12:11:49 · answer #5 · answered by Judy 7 · 0⤊ 0⤋
the person filing the form
2007-06-08 10:53:28 · answer #6 · answered by Anonymous · 0⤊ 0⤋
The normal way is for the recipient (you) to be so happy and gracious in receiving the house or gift, that you would pay for it. However, if you really don't appreciate what she's done for you, I guess you could talk her into paying for that too. Make sure you don't assume it was paid, ask her about it.
2007-06-08 10:56:06 · answer #7 · answered by Nifty Bill 7 · 0⤊ 3⤋