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gift of equity from siblings

Posted on: 25th Oct, 2009 06:01 pm
my mother passed away 2 years ago and left her (only) asset, her house in nj, will'd to be equally divided amongst the 11 sons and daughters. i am one of the 11 siblings and my other siblings are planning to give equal value gifts of equity amounting to, around, $6500 each.

the house is being sold to me by my other siblings for $250,000 with the above (totalling to) $65,000 gift of equity, note also that the house is part of a probate which we are hoping to close by this transaction.

questions:
-what are the tax consequences to me and my individual siblings?
-the house is still under the umbrella of the estate. does that mean, as far as irs is concerned, i received a gift of equity from one "legal person" or does it automatically get divided among the beneficiaries?

thanks,

nokijok
Hi nokijok,

Your siblings will be giving you the money as gift of equity. You will not be liable to pay any taxes on it. But your siblings who are gifting you the money will be subject to a gift tax. But there is annual as well as lifetime gift tax exemptions, which they can claim on their taxes.

The house is currently under the umbrella of the estate and is going through probate. But once the property is probated, each one of your siblings will get their individual share in the property. When they will gift you the equity, it will not be considered as a gift from one 'legal person', but from individual beneficiaries of the estate. For further clarification of this issue, you can contact a tax advisor.
Posted on: 25th Oct, 2009 11:09 pm
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