What are the implications of gifting property to family?
What are the implications of gifting property to family or using trusts ?
I read about the tax implications but I am interested in hearing from experts of other implications. Are there other ways to gift properties to family?
Thanks
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@Grace Carol
Starting in 2018 - The annual gifting exclusion is $15,000.
If you are gifting properties - you may be required to file a gift tax return.
The Exemption for estate taxation has also increased to some 11 million amount meaning estates valued(or gifted through life) at 11 million or less are not subject to an estate tax.
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The main implication of gifting property to family is complicating family dynamics. Only half-joking here.
The recipient "inherits" your tax attributes. If you bought the property 20 years ago for $50k, and it is now worth $500k - the recipient can only depreciate $50k. And if he sells, he will owe tax on $500k minus $50k. Ouch.
You will not pay any tax. You might have to file a very simple gift tax return, but won't have to actually pay. Instead, you will be eating into your eventual post-death exemption from estate tax - which is not a concern unless you're a multi-millionaire. And if you are - then discuss it with your estate planner.
Thank you both!