My Dad gave me $80,000 from the sale of some property as a gift. He passed away just last Friday, and I hate to think of money at a time like this, but I'm wondering what will happen as far as taxes! I know you have a 12,000 exemption. But will I need to pay a gift tax on this since he can't? And what about capital gains tax? Any help is appreciated! thanks!
2007-12-27 11:50:43 · 7 answers · asked by Anonymous in Business & Finance ➔ Taxes ➔ United States
There are three tax returns affected:
Form 709 Gift Tax Return. This needs to be filed on behalf of the deceased by the personal representative or executor.
Form 1040 Federal Tax Return. The deceased person's final return must be filed. Capital Gains would be reported here.
Form 1041 Federal Estate Tax Return. May be required if the estate is above the cutoff.
The personal representative or executor should have these returns prepared. If you are that person, and your father's estate does not have the money to pay the necessary taxes, consult a tax attorney to see what your responsibilities would be.
2007-12-27 16:46:03 · answer #1 · answered by ninasgramma 7 · 0⤊ 0⤋
You are correct in that the free gift amount is $12,000. If his spouse was still living at the time of the gift, it could have been considered a joint gift for $24,000. At any rate, there is no tax due to you and it is the estate's issue. The estate will have to file the estate return, which will take into account the gift. There will also have to be a final return filed for your farther in addition to the estate return. The final return will be responsible for the capital gains on the property sold, unless it was owned by a trust.
However, there are many variable which could complicate this situation. A trust being one of them. There also may not need to be an estate return if everything was owned by a trust and very little passed by will. I suggest retaining the services of a good tax accountant to be sure the proper returns are filed and income is allocated properly.
Hope this helps. Good luck
2007-12-27 13:13:36 · answer #2 · answered by RANDALL M 3 · 0⤊ 0⤋
The gift may become part of the estate treated as a gift in contemplation of death. In any case, the estate is responsible for paying the taxes. It is not the recipient's responsibility. For the time being, it would be best if you bank the money and don't spend it until the executor determines the status of the gift. There is no capital gain. Gifts are not taxed as income. That's why there is a gift tax.
2007-12-27 11:55:51 · answer #3 · answered by Anonymous · 3⤊ 0⤋
Sorry about your dad.
The executor of the estate should file a gift tax return for him. Unless he has given over a million dollars in gifts over his lifetime, there won't be a gift tax due. And unless his estate plus the gifts he gave over $12K a year total over $2 million, his estate won't owe federal estate tax either.
If he sold the property while he was still living, any capital gains will show on his tax return for the year of the sale and the capital gains tax will be paid there. The executor is also responsible for filing that return, showing it as "final return".
2007-12-27 13:37:29 · answer #4 · answered by Judy 7 · 0⤊ 0⤋
He'd could desire to report a recent tax return. He does not unavoidably could desire to pay any tax as long as he hasn't already used up his lifetime exemption, yet whilst he does not, it may desire to influence the tax on his property whilst he dies if he has greater sources than although the shrink is then. it quite is for federal - i don't be attentive to if there could be any state tax implications in CA. most of the solutions above are partly or thoroughly incorrect, by applying the way - even some with some "thumbs ups" are incorrect. If any tax is owed, your dad will owe it, no longer you. He components you, or as a lot of people as he desires to, as much as $12K a three hundred and sixty 5 days with no need to report it. And final I appeared, CA quite had an income tax, although if it may very no longer likely prepare to this present out of your dad.
2016-10-09 06:39:58 · answer #5 · answered by beadling 4 · 0⤊ 0⤋
How large was your dad's estate?
For 2007, there is a $2Million exclusion. The estate would include the gift, so if this is the first gift he made, there won't be any gift taxes due.
2007-12-27 13:03:17 · answer #6 · answered by Anonymous · 0⤊ 0⤋
You need to speak to a estate accountant.
Your father can pay taxes. His estate will have to pay for them.
There is a $10000 gift allowance that can be given without tax.
You best bet is talk to a good accountant.
Cheers and good luck!
2007-12-27 12:30:07 · answer #7 · answered by rutgersgroup 4 · 0⤊ 2⤋