Originally Posted by movinit56
#1;How do we report this on our taxes and how does she report it on her taxes?
#2;She was 50% owner for part of the year and is now 100% owner. Does she show that as a sale and a purchase?
#3;Do we file a gift return to report our gift?
#4;What else do we need to do for our taxes?
#1;as the amount of the gift,$115.5K, exceeds 14K(or $28K if you choose gift splitting), then you as a donor, need to file form 709. A husband and wife may combine their annual gift tax exclusions and unified estate and gift tax credits . For example, a husband and wife may consent to jointly give a child $28K annually by combining their individual annual exclusions of $14K for 2013 per donor per donee .Gift splitting is accomplished even when only one spouse has assets sufficient to make the combined gift
#2;No; she is a done, sa arecipeint of the 50% ownership no need to report it as a sale/ a purchase on her return.A done doesn’t pay the gift tax and no ned to report or nothing. HOWEVERR,
NOTE; When she receives it as a gift, the FMV of thepty, $231K, is LOWER than its basis, $249K,it gets a lot more complicated. she will actually not know her basis untilshe sell the pty because it will have
a different basis if it is sold at a gain than if it is sold at a loss. If the pty she received as a gift is then sold at a loss, her cost basis is the
lower of either the carryover basis or the fair market value at the time of the gift.so in this case it is her basis, $231K.If the pty she received as a gift is then sold at a gain,her cost basis is the carryover basis from her donor, you, $249K.
#3;Correct; your must file form 709 as the amount of your gift exceeds $14K for 2013.However, unless the amount of your cumulative egifts(or gift that made once) exceeds5.25M for 2013, you are not subject to gift tax tot the IRS.
#4;as mentioned above.