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Questions on Gift Tax & Form 706
Greetings,
My father wants to sell a property to me for way below market value. Market value: $400k, and purchase price: $175k in Alameda County California.
He is gifting me $225k. I am financing $175k
Will he have to pay taxes on $225k? This is the only gift he will ever give me in his lifetime, and therefore does not exceed the $5.45million lifetime gift limit. However, obviously this is over the $14k yearly limit.
The biggest question is on tax liability. Would he have to pay taxes on this gift for the year 2017? Would he ever have to pay taxes on that gift? Does he report the entire amount on form 706, or can he structure his tax returns reporting 14k/year for the next 17 years?
Please advise, thank you.