grandmabee Posted March 23, 2011 Report Share Posted March 23, 2011 taxpayer wants to down size and will sell their home to son. basis is 400,000 fmv 300,000 is selling to son for 200,000 all that he qualifies for loan from bank. so do I file a gift tax return for the difference of the fmv vs the sale price to related party? Quote Link to comment Share on other sites More sharing options...
schirallicpa Posted March 23, 2011 Report Share Posted March 23, 2011 yes Quote Link to comment Share on other sites More sharing options...
kcjenkins Posted March 23, 2011 Report Share Posted March 23, 2011 Yes, to protect both sides. And tell them to get a WRITTEN APPRAISAL of the FMV now, as well. It'll cost a little bit, but is well worth the cost in protecting them from arguments. Might even get the value down a bit, for the gift issue. Quote Link to comment Share on other sites More sharing options...
michaelmars Posted March 23, 2011 Report Share Posted March 23, 2011 IF parents and son are both married you can reduce the gift to 50k from the lifetime exclusion Quote Link to comment Share on other sites More sharing options...
schirallicpa Posted March 24, 2011 Report Share Posted March 24, 2011 I read in a Kiplinger letter that the states are working with the Feds to give the Feds real estate transfer records. When real estate is transfered at below market values, then the Feds can go after the tranferor looking for a gift tax return. Even if no gift tax is due - penalties are. Way to go Feds! Who thought up that great revenue stream.......... As in everything bad, take the opportunity to pass along to your attorney friends, and maybe you can pick up a couple extra gift tax returns. Kinda sad, really. Quote Link to comment Share on other sites More sharing options...
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