gift taxes on inherited home

daltonsjr · Joined: 22 Jul 2008 Posts: 13 8.34 Dollars($)

I think I posted this in the wrong section. So, here goes again.....

My mother passed away (no will).The 5 siblings have inherited her home.
4 of us wish to gift this home to one sibling.The question is if we transfer the house to her, will we owe gift(or any other )monies. The house would probably be appraised at 600,000 and it has a 550,000 Mortgage on it.

Also, would we be responsible for her)moms) outstanding debts before the transfer or would the estate absorb them, and what documentd should we expect to sign?

Just don't want anysuprise debt later on.

Thank you.

jameshogg · Posted: Mon Dec 22, 2008 11:07 pm Post subject:

Hi daltonsjr,

As far as I know, 4 of you will have to pay gift taxes if you are giving the property to the 5th sibling. However, gift tax exemptions are also available. Gifting up to $12,000 per person per year is not subject to tax. Apart from this, a lifetime gifting limit of $1,000,000 is allowed before a gift tax is incurred.

If it's an unsecured debt like credit card balances, then it will be paid from the estate. But in case of secured debts like mortgage or car loan, whoever inherits the property will have to pay off the debts. As 5 of you own the property now, it will yours responsibility to pay off the debt. Once the property is transferred to the 5th sibling, then he/she will be liable to pay off the debts.

In order to transfer the property to your 5th sibling, you all can sign a quitclaim deed or a warranty deed. This deed should then be notarized and recorded at the county recorder's office. Once the property is transferred, the 5th sibling needs to refinance the mortgage in his name.

Thanks

Guest

should we have to pay gift taxes in america

Guest

Hi mellisa,

You need to pay property taxes when you gift somebody a piece of real estate property. However, there are various gift tax exemptions available.

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