A Gift in and of itself has no income tax implications
Several points to consider in regard to giving money to a child or grandchild or anyone else.
- Gifts made for whatever purpose, in and of themselves, never create an income tax liability for the recipient nor the donor and do not provide for any deduction of taxes owed by the donor.
- If one person (such as you alone) gives more than $15,000 in cash of value in kind, such as would be the case here it seems, in one year directly to one other person (such as your grandchild), then you have created the need to file in that year and every succesive year a Form 709 Gift Return (not part of the Income Tax system, not supported by TurboTax).
- Please explain what you actually did when you say "Gift of equity" - are you saying that you sold the home at a discount against Fair Market Value?
- If you gave part ownership to someone of a home, and that home will be used by the recipient as a personal residence, the future computation of whether or not gain is to be realized at the time of that future sale is made more complex because the cost basis computation itself will be complex.
If this posted response is useful to you, please click on the upraised hand in the lower left of this post. Thank you. Scruffy Curmudgeon--PFFM/ IAFF, retired FireFighter/Paramedic - Locals 718/30, Veteran USAR O3 AIS/ASA '65-'67
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