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Old 02-01-2014, 09:59 PM
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Cool Gift of partial ownership in a duplex

We were 50% owners on a duplex that we bought for $249,000 eight years ago. Our daughter was the other 50% owner. She lived in one unit for 3 years then converted her side to a rental as well. In 2013 she financed the duplex in her name and we gave up our 50% ownership to her. The duplex at that time was valued at $231,000.

How do we report this on our taxes and how does she report it on her taxes? She was 50% owner for part of the year and is now 100% owner. Does she show that as a sale and a purchase?

Do we file a gift return to report our gift?

What else do we need to do for our taxes?



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Old 02-02-2014, 11:18 AM
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Quote:
Originally Posted by movinit56 View Post

#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.



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Old 02-02-2014, 11:52 AM
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Talking Thanks

Thank you for the quick reply. On our daughter's taxes for this year on her Schedule E I think she will show 50% of the expenses up to the date that we came off the title then add in 100% of the expenses for the remainder of the year?

And for her then the date that the duplex was placed in service still remains the same (?)

It will be nice to get our taxes done and you answer has helped!



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Old 02-02-2014, 12:26 PM
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I got you ; sorry it is my bad.When you gift property to your children, whatever you paid for the property essentially becomes (for tax purposes) what your children paid for the property.



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Old 02-02-2014, 12:40 PM
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And for her then the date that the duplex was placed in service still remains the same (?)============>>>>>>the time when the duplex, for the other 50% ownershp, was placed in service is the time when she received it from you as a new owner on the other 50% ownership.



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Old 02-02-2014, 01:36 PM
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cannot see replies

Hello. I can tell that there are more replies to this post and I am sure they answer my questions but I cannot get them to display. I have tried in this thread and I can only see my original question and the original reply.

I posted a second question as a reply to this thread and I can tell by the number of replies that the question has been answered but I cannot see my second question or any of the replies.

I have closed out of and come back into the thread. I am signed in.

Anyone know why I cannot see my other replies?



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Old 02-02-2014, 02:11 PM
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Thanks for all of your answers. I can finish the taxes now



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Old 02-02-2014, 06:57 PM
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How do we report that we no longer own this rental duplex

Quote:
Originally Posted by Wnhough View Post
#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.
Hi. I still seem to be missing something. Normally when we sell a rental property we report that sale on a Form 4797. How do we show that we disposed of this property since we gifted our portion of this rental to our daughter?



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Old 02-07-2014, 09:46 PM
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Quote:
Originally Posted by movinit56 View Post
Hi. I still seem to be missing something. Normally when we sell a rental property we report that sale on a Form 4797. How do we show that we disposed of this property since we gifted our portion of this rental to our daughter?
Still not sure how to show the removal of this property from our Schedule E for taxes. If we gifted it does it go as a sale on our taxes on form 4797 since this was a rental property for us?



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Old 02-07-2014, 11:47 PM
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Quote:
Originally Posted by movinit56 View Post
Still not sure how to show the removal of this property from our Schedule E for taxes. If we gifted it does it go as a sale on our taxes on form 4797 since this was a rental property for us?
Sorry I am not sure about it. I do notthink you need either sch D/8949 or f 4797 as you as a donor do not need to recapture the unrecap depre, sec 1259 depre I mean, on the portion of the gifted rental homeYou can contact the irs for more info in detail.You need to prepare a deed to your child for the fractional interest in the property that is gifted;if a gift tax return needs to be filed by April 15th of the year following the gift, or April 15, 2014 for gifts given in 2013.



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