To avoid paying taxes, my dad would like to gift money to my son and I from the sale of property?
irolg asked:
Is this possible? My father received $80k from the sale.
I forgot to advise: We are in Texas. The property was a vacant lot.
naromi30
Is this possible? My father received $80k from the sale.
I forgot to advise: We are in Texas. The property was a vacant lot.
naromi30
August 31st, 2008 at 12:20 am
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September 3rd, 2008 at 5:25 am
he’s allowed to gift 12000 to each
September 4th, 2008 at 5:10 pm
check but i think he can legally gift each of you $10,000 tax free if it is more i am not sure call and ask a tax attorney or someone from h&r block.good luck.
September 5th, 2008 at 4:20 am
Giving the money away does not mean it was not taxable when it was recieved. However, he should know that much of the profit from the sale of a home is exempt from taxes.
September 6th, 2008 at 4:23 pm
may want to consult a lawyer just in case, but a certain amount of gift money is non taxed if its from a relative. I believe its 10-12k that he can give each of you. It sounds like it would work, try Lawguru.com ,i used it once and it took about a week to get an answer but they are lawyers answering.
Thats a sneaky but good idea. Kudos to your dad keeping the money in hands of family and not government
September 9th, 2008 at 11:26 am
it is but more than likely u will be responsible for the taxes on it. what he could do i put it in a trust for u and your son. it might be wise to talk to a banker they would know best way to avoid taxes
September 10th, 2008 at 3:30 am
As gifts are not deductible, there is no tax advantage to giving you the money. He would have to give part or all of the profit to a qualified charity to reduce his taxes.
If the property has been sold already, there is nothing that can be done to minimize the tax bite without giving it to charity.
There is no way to avoid the taxes. If he had exchanged the property for another, he could have postponed the taxes but that is it.
September 12th, 2008 at 4:28 pm
To “avoid” paying taxes, your father should have consulted a CPA prior to the sale. He should have done a 1031 exchange or kept it until he passed, and left it to you or your son – at the time of death, the property would receive a “stepped-up basis” to the current fair market value. He can always “gift” money, but he will still owe tax on the profit from the property now.
September 13th, 2008 at 7:50 pm
He has to report this on Schedule D, and pay tax on the capital gain. It doesn’t matter what he does with the $80K.
September 16th, 2008 at 3:17 pm
He better call IRS. He’s headed for trouble.
September 17th, 2008 at 7:47 pm
He’ll still have to pay the taxes on the sale, no matter what he does with the money after that. A gift is not deducted from his income.
September 19th, 2008 at 6:28 pm
That won’t avoid any taxes. There’s no way to avoid the tax on the gain on the property.
Depending upon the amount of the gift, more taxes could be due.
If a taxpayer gives more than $12,000 in gifts to any one recipient in any tax year a Gift Tax return will be due. Tax may be due if the taxpayer has used up their lifetime exclusion amount, currently $1,000,000. If this is the only gift your father has given then there will not be any tax due for the gift. The capital gains tax on the gain on the sale of the lot will be due; there’s no way to avoid that.
September 22nd, 2008 at 3:48 am
If he already sold the property, the gain on the sale is taxable income to him whether he gives the money away or not.
Gifts are not tax deductible. He can give the $80K away but he will still have to pay income tax on the gain he made on the sale.
If he had given the property instead of selling it, then the taxes on the gain would be paid by the donees instead of the donor.