Posted on: 02nd Mar, 2007 10:00 am
i want to quit claim deed a hunting property to my 2 sons, how do we value this if it is going to be a gift do we use the assessed value or what we could sell it for on the market or do i put my own value on it ie; 12,000 allowed under gifting deduction. what are the tax consequenses to them or me. thank you
Hi Judy,
You can put the value you will receive on the deed and if that amount is less than the actual market value then it is considered as a gift and applicable gift taxes would have to be paid. The person who gifts the property is known as donor and is required to pay the gift tax if it would be applicable.
In your situation, as you would be making the gift any applicable gift taxes need to be paid by you. But gift taxes are to be paid if the amount exceeds the allowed exemption limits. The annual gift tax exemption limit is $12,000 which means that a person can make a gift up to this amount in a year.
If the value of the gift exceeds this exemption limit then it will be considered as part of the lifetime gift tax exemption limit of $1 million. But gift taxes are not to be paid if the lifetime gift tax exemption limit is not crossed. And you will only have to file gift tax return using Form 709.
David
You can put the value you will receive on the deed and if that amount is less than the actual market value then it is considered as a gift and applicable gift taxes would have to be paid. The person who gifts the property is known as donor and is required to pay the gift tax if it would be applicable.
In your situation, as you would be making the gift any applicable gift taxes need to be paid by you. But gift taxes are to be paid if the amount exceeds the allowed exemption limits. The annual gift tax exemption limit is $12,000 which means that a person can make a gift up to this amount in a year.
If the value of the gift exceeds this exemption limit then it will be considered as part of the lifetime gift tax exemption limit of $1 million. But gift taxes are not to be paid if the lifetime gift tax exemption limit is not crossed. And you will only have to file gift tax return using Form 709.
David
Judy,
I found a similar query answered at http://www.mortgagefit.com/discuss/quitclaim-taximplications-16.html#taxissues
I found a similar query answered at http://www.mortgagefit.com/discuss/quitclaim-taximplications-16.html#taxissues