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Old 10-09-2012, 02:18 PM
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Gift Taxes?

My Father-in-law lives in Iowa and was dating a woman and he paid off her house. Both of their names were put on the deed. She ended up convincing him to have his name taken off the deed and now it is only in her name. Is there going to be any kind of tax inplication (gift taxes) that she will be liable for? I am asuming yes but I cannot find the answer. Is he going to be responsible for anything?



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Old 12-20-2012, 01:16 PM
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My Father-in-law lives in Iowa and was dating a woman and he paid off her house. Both of their names were put on the deed. She ended up convincing him to have his name taken off the deed and now it is only in her name. Is there going to be any kind of tax inplication (gift taxes) that she will be liable for?”----------->No not at all; the gift tax is a tax on the transfer of property by one individual to another while receiving nothing, or less than full value, in return. In general, your FIL,the donor, is generally responsible for paying the gift tax. Under special arrangements the done, his GF, may agree to pay the tax instead. So his GF is NOT liable for any gif tax on her return; however, your FIL gave gifts to his GF in 2012 totaling more than $13K (other than to his spouse, your MIL), then your FIL must file form 709.but UNLESS total cumulative gift amount is $5.12 million, he doesn’t need to pay any gift tax. Your FIL doesn't get an income tax deduction for such gifts as gifts are all after tax dollars.SO: If there's a gift tax due( as the cumulative gifts exceed $5.12 Mil), then, the person giving the gift is responsible for paying it. The estate tax, gift tax and generation-skipping transfer tax exemptions have been indexed for inflation for the 2012 tax year such that each will be increased from $5 million to $5.12 million beginning on January 1, 2012.
“I am asuming yes but I cannot find the answer. Is he going to be responsible for anything?”----------> As described above.



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