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albrightkc
New Member

Gifting Rental Property to child

Child would use the property as his primary home
1 Best answer

Accepted Solutions
Hal_Al
Level 15

Gifting Rental Property to child

There are no income tax consequences at the time of the gift. Your cost basis, in the property, including accumulated depreciation would transfer to your son. When he sells the property in the future, he will use your cost basis to calculate his capital gain. However, if he meets the rules for it being his primary home, some of the gain will be excludable. 

As others have indicated you may need professional help in providing the information he will need for his files. Also, for estate planning, If is usually better for a son to inherited property rather than having it given to him.

Even though nothing goes on your income tax return, a gift tax return may be required. "Gift Tax" is somewhat of a misnomer.  Even though a gift tax return may be required, very few people ever actually pay federal gift tax. The purpose of the gift tax return is usually only to document a reduction in the allowable estate tax exemption.

See https://turbotax.intuit.com/tax-tools/tax-tips/Tax-Planning-and-Checklists/The-Gift-Tax-Made-Simple/...

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4 Replies
Critter
Level 15

Gifting Rental Property to child

Seek professional help with this situation before you do anything since there are many facets to consider that depend on too many factors to discuss here.  

Seek a RE attorney that specializes(understands)  in tax returns, or a tax preparer that understands the legal ramifications,  or a financial planner who understands these situations, or a Elder Law Attorney for the possible medicaid/medicare rules... or a combination of all of the above.
Hal_Al
Level 15

Gifting Rental Property to child

There are no income tax consequences at the time of the gift. Your cost basis, in the property, including accumulated depreciation would transfer to your son. When he sells the property in the future, he will use your cost basis to calculate his capital gain. However, if he meets the rules for it being his primary home, some of the gain will be excludable. 

As others have indicated you may need professional help in providing the information he will need for his files. Also, for estate planning, If is usually better for a son to inherited property rather than having it given to him.

Even though nothing goes on your income tax return, a gift tax return may be required. "Gift Tax" is somewhat of a misnomer.  Even though a gift tax return may be required, very few people ever actually pay federal gift tax. The purpose of the gift tax return is usually only to document a reduction in the allowable estate tax exemption.

See https://turbotax.intuit.com/tax-tools/tax-tips/Tax-Planning-and-Checklists/The-Gift-Tax-Made-Simple/...
Mikeee1
New Member

Gifting Rental Property to child

Is there a form that I need to fill out when I gift my rental (depreciable asset) to my child?

Carl
Level 15

Gifting Rental Property to child

RS Form 709 - Gift Tax Return is required if the value of any gift given in a tax year exceeds $15K. TurboTax does not support this forum. Get a blank on at https://www.irs.gov/pub/irs-pdf/f709.pdf. DO NOT mail it with your personal 1040 tax return, as the 709 gets mailed to a different address, and it can not be e-filed.

 

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