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Old 05-28-2015, 02:30 AM
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Gift Tax

Dad died in 2010. 3 children (heirs at law) In 2011 my sister conveyed by warranty deed her interest to our uncle (dads brother) . Our other brother was difficult and refused access to the real property resulting in me probating the estate the firs of 2014. Because we have to sll the real property to pay the debts of the estate the Probate Judge recommended the probate estate to be moved to circuit court because he felt there is an issue of her deeding her interest before probate. My question is she gifted her interest (worth $ 28k per share) would my sister owe the IRS a gift tax as a donor and also my uncle received property as a gift and when the rea property sells to pay debts and divide proceeds would he owe taxes on the money he receives from the sale. Total appraised value of property is $ 84k with 3 undivided interest this is in the State of Alabama



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Old 05-28-2015, 09:17 AM
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My question is she gifted her interest (worth $ 28k per share) would my sister owe the IRS a gift tax as a donor and also my uncle received property as a gift and when the rea property sells to pay debts and divide proceeds would he owe taxes on the money he receives from the sale. ======>No not at all .Currently, a taxpayer does not pay gift tax until they have given away over $5.43 million in their lifetime ( for 2015). ; however, as you mentioned, since the amount of her gift exceeds $14K for 2014(when she gifted her interest to her uncle), she needs to file IRS form 709;aslongas you give gifts to someone in 2014 totalling more than $14K (other than to your spouse), you must file Form 709. However, certain gifts, called future interests, are not subject to the $14K annual exclusion and you must file Form 709 even if the gift was under $14K. So, she needs to file f 709 with the IRS ; she must file the Form 709 no earlier than Jan 1, but not later than Apr.15, of the year after the gift was made.Her uncle , as a donee, does not pay gift tax; the donor is generally responsible for paying the gift tax as said above. However, when he receives any interest income on his gift money( when he deposit it into a bank acct) from a bank, then he needs to pay tax on the interest income from his bank account .



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Old 05-28-2015, 10:58 AM
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Gift of real property

I may of explained things badly. My father died in 2010. My sister conveyed her interest in real property away in 2011 to my uncle. Then in 2014 I probated the Estate. Now I have to sell the real property to pay the debts of the estate and then do a division. She should of filed Form 709 for 2011 taxes between 1/1/12 and 4/15/12.

Because my uncle received my sisters interest as a gift and then we sell it in probate court and he receives a 1/3 of the proceeds after the debts are paid Would he not have to pay capital gain on this money because he was not a direct decendent?



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Old 05-28-2015, 11:00 AM
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I may of explained things badly. My father died in 2010. My sister conveyed her interest in real property away in 2011 to my uncle. Then in 2014 I probated the Estate. Now I have to sell the real property to pay the debts of the estate and then do a division. She should of filed Form 709 for 2011 taxes between 1/1/12 and 4/15/12.

Because my uncle received my sisters interest as a gift and then we sell it in probate court and he receives a 1/3 of the proceeds after the debts are paid Would he not have to pay capital gain on this money because he was not a direct decendent?

Also, since he is not a direct heir How can a person receive 28k and not ay taxes on this money since in a way someone just gave it to him more or less?



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Old 05-29-2015, 11:14 AM
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Originally Posted by [email protected] View Post
I may of explained things badly. My father died in 2010. My sister conveyed her interest in real property away in 2011 to my uncle. Then in 2014 I probated the Estate. Now I have to sell the real property to pay the debts of the estate and then do a division. She should of filed Form 709 for 2011 taxes between 1/1/12 and 4/15/12.

Because my uncle received my sisters interest as a gift and then we sell it in probate court and he receives a 1/3 of the proceeds after the debts are paid Would he not have to pay capital gain on this money because he was not a direct decendent?

 I guess the situation is pretty tricky; In my opinion I do not think so as it is still a gift for the uncle(since he himself never sold it and earned capital gain from sale of the gift)as said no; since he received her interest as a gift from your sister(even if it was sold in the probate court or etc) He, as a donee, is not liable for gift tax UNLESS he himself sold it at a gain. However, assume that he receives a gift( I mean the final amount of the gift for him, his portion, a 1/3 of the proceeds after the debts are paid) from the probate court and then he sells it at a gain then he needs to pay tax on the gain. ALSO, UNLESS the gift amount exceeds $14K for 2014, your sister may need to amend her 709 since the final gift amount for her uncle is less than $14K for 2014.



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