A gift tax is a tax levied by the federal government, and in some cases states, on assets transferred from one person to another. The tax requirements could vary greatly in different situations, so it is always wise to consult with a real estate or tax attorney. Look here for some information on gift taxes and what you need to know.
What do you have to do in terms of taxes if you gift your share of a property using a quit claim deed? It depends on how much equity you own in the property. If you have less than $11,000 in equity in a property you likely don't have to do anything. If you own more equity than that, then you may have to file forms with the IRS describing the value of your share of the property that you quit claimed. An accountant or estate planner should be able to help you determine the tax implications of signing a quit claim deed.
When you're buying property from a family member and don't want to incur a lot of taxes, what can you do? Should the property be put into a trust or should the deed be transferred into the new owners' names? One option is to do a seller financing deal, where you pay your family member as if he or she were a mortgage lender.
Is a quit claim deed is the right answer for ensuring that beneficiaries avoid probate and that a home will ultimately go to your children? Quit-claim deeds often cause considerable problems for both the homeowner and the homeowners-to-be. A trust might be better for ensuring that inheritance avoids probate. Consult an estate planning attorney to learn about inheritance options.
If you wish to leave property to your heirs, a quit claim deed while you're still living isn't the best way to go. Transferring ownership by a quit claim deed can cause a big tax problem and possible gift tax. Putting assets in a trust is a better solution than using a quit claim deed.
Tax time again! Whether you are using a paid tax preparer or filing solo, you'll need to stay on top of the tax laws. Using software and filing online helps keep track of the myriad of changes to the tax laws each year. If you don't know what deductions you can take, the IRS's website offers hundreds of publications that explain the deductions available for each profession.
Financing a mortgage for an investment property where one of the owners is not a U.S. citizen can be tricky. Most mortgage lenders are reluctant to finance a mortgage on an investment property to an immigrant who does not have a long-term visa or has become a resident of the United States. Ilyce and Sam help this reader figure out the best way to finance a mortgage on an investment property where his potential co-owner does not have U.S. citizenship.
When you have rental property that you want to bequest to your children you should do some estate planning. You can change the real estate title while you're alive or wait until your passing depending on your estate planning. Depending on how you pass along the property your children may face an increased cost basis when they sell the home, resulting in higher taxes. To reduce taxes on an estate it's helpful to set up a trust as part of estate planning.
When you're giving property as a gift, do you're homework to minimize the gift taxes. If you want to give real estate as a gift and not pay high taxes to the IRS, you have to take a few important steps, and consulting an attorney will help you take them. Ilyce Glink walks you through the basics of gifting property with minimum gift taxes.
Home owners wonders how to structure a deal where they sell their home to their daughter for a price less than value of the property. They must first determine if the transaction is a gift or a loan and how to deal with the IRS. If it is a gift, they need to talk to an estate planner to determine how to structure the transaction without triggering gift taxes that may be required to the IRS.
Parents who want to sell their home to a child are better off giving their kids cash toward the down payment for the home or the mortgage. The IRS allows you to give $11,000 as a cash gift tax-free each year, which the kids could use to pay the mortgage when buying the home. Giving your child enough cash to miss the gift tax will help them get their mortgage loan and buy the home.