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 spcd
Joined: 19 Jun 2007
Posts: 1
1.30 Dollars($)
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 Posted: Tue Jun 19, 2007 7:58 am Post subject: What are the financial implications for property transfer? |
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| My parents have offered to give me some of their land in order to build on it, I just don't want it it have bad financial implications for them. Who would have to pay taxes? Would they penalized in any way? Would I? |
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colin
Moderator
Joined: 30 Jun 2006
Posts: 602
Location: Waltham, Massachusetts
112.65 Dollars($)
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| Posted: Tue Jun 19, 2007 11:09 am Post subject: |
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Hi Spcd,
Welcome to Mortgagefit forum.
If you do not pay your parents an amount equal to land's current value then it will be considered as a gift made to you.
The donor of the gift (your parents) has to pay applicable gift taxes in such situation. So what it means is that your parents may have to pay gift taxes if you are not going to pay anything that is equal to the actual value for the land.
But let me also tell you that there are gift tax exemptions available and if the value of the gift made exceeds those limits then only gift taxes will have to be paid.
The annual gift tax exemption for each individual is $12,000 ($24,000 if both own the land together) and if the value of the gift exceeds this amount then it will considered as part of the lifetime gift tax exemption limit of $1 million available to each individual.
If this lifetime gift tax exemption limit is crossed then only gift taxes will become due.
Colin |
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miller_st
Joined: 17 Jan 2007
Posts: 917
168.95 Dollars($)
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| Posted: Tue Jun 19, 2007 1:01 pm Post subject: |
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Your parents will not be penalized in any way for transferring land ownership to you. They own the land and can give it to anyone whom they like to. There are no penalties involved in this kind of property transfer transaction. The same applies for you also. If anyone willingly gives you some property than there is no harm in it and it’s completely legal. You need not be bothered about it.
Miller |
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Petrie
Guest
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| Posted: Thu Jun 21, 2007 6:15 pm Post subject: |
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| Quote: | | My parents have offered to give me some of their land in order to build on it, I just don't want it it have bad financial implications for them. Who would have to pay taxes? Would they penalized in any way? Would I? |
Are there any liens on this property? If there are then you will be taking over the ownership along with the liens which are present. |
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