Message Font: Serif | Sans-Serif
 
UnThreaded | Threaded | Whole Thread (12) | Ignore Thread Prev | Next
Author: JAFO31 Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 121144  
Subject: Re: First-time home-buying question Date: 6/2/2003 9:38 PM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 3
lorenzo2:

<<<<Will there be a gift tax of some sort on the $50K?>>>>

"Not for your girlfriend - there are no tax consequences for the recipient of a gift like this. There will be consequences for her father. The annual limit on giving is $11K per person (father and mother combined could give her twice that, or $22K). Beyond those limits, father/parents need to file a gift tax return. Typically that doesn't actually generate an immediate tax liability, because the way it works is that each person has something called a unified gift/estate tax credit, which amounts to the tax on about a million dollars (the limits are changing yearly). Actual taxes don't get levied until you've exceeded that amount. Instead, the gift is set against that limit, and eventually (when father dies) it will work out that estate tax kicks in a bit earlier than otherwise because of this gift. Or maybe not - our friends on Capitol Hill keep changing the rules, and who knows what the law will be next year, never mind 20 years from now.

So - short answer, no problems for girl friend, gift tax return (but likely no tax liability) for father."


I agree with Lorenzo description of gift tax rules.

"Lorenzo, waiting for irasmilo to tell me this is all wrong"

I am not irasmilo nor a tax pro, but I tend to doubt the characterization as a gift.

OP wrote: he is going to be on the title and will expect to receive benefits such as appreciation at the time of sale. . . . , but after the close he will be put on the title, or at least that's the plan."

IMO, someone who expects to be on title and to receive benefits such as appreciation is not making a gift. I would guess that they are creating some kind of bass-ackwards, oral general partnership that is completely ill-defined and which will be a real mess, BWDIK?

Regards, JAFO
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Print the post  
UnThreaded | Threaded | Whole Thread (12) | Ignore Thread Prev | Next

Announcements

Disclaimer:
In accordance with IRS Circular 230, you cannot use the contents of any post on The Motley Fool's message boards to avoid tax-related penalties under the Internal Revenue Code or applicable state or local tax law provisions.
Post of the Day:
Berkshire Hathaway

Brookfield Asset Management
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Community Home
Speak Your Mind, Start Your Blog, Rate Your Stocks

Community Team Fools - who are those TMF's?
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and "#1 Media Company to Work For" (BusinessInsider 2011)! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.
Advertisement