Gift Tax on Property. Taxed on Equity or Full Home Value?

[HappyTaxPayer1978]

Hello all!

My partner wishes to add me to the deed of a home that we purchased recently.   She plans to use the quitclaim deed process.

This house is not paid off and I am not on the mortgage.    Though I did help pay the down payment.

My question:

From my understanding when my name is added to the deed it will be considered a gift with the IRS.  Correct?

How is the gift amount calculated?

Would I be taxed on the equity in the home (under 20k)  or am I taxed the fair market value of the home?

[M-MTax]

You're not taxed on the amount of the gift but that amount is half the equity in the home and not the full value because you have to subtract the mortgage. Partner needs to file a gift tax return if value is over $15k

[HappyTaxPayer1978]

Thank you for the reply.

I was expecting and hoping  the gift tax was based on home equity.

You make a good point that the tax is based on 1/2 the equity.

Sounds like my gift will be below the $15,000 threshold too.  That is great news.

[Critter-3]

Is there a reason you were not on the mortgage/deed  to begin with ... you has best check with the mortgage company before you do anything ... it may not be allowed.  

[HappyTaxPayer1978]

Our situation is complicated.   

The mortgage company does not care if others are added to the deed. (no clause, we asked)

[macuser_22]

You do realize don't you, that there is no actual tax.   The 709 form just applies the taxable amount to your lifetime $11.4 million exemption.    For most people a few hundred thousand here or there makes no difference at all.    Only the ultra rich with more than $11 million in assets need to worry about it and they usually have high priced tax attorneys to do it for them.

[HappyTaxPayer1978]

Wow No I did not realize.

I assumed anything over 15k in yearly gifts was taxed like regular  income or at "gift tax rates"

Guess I misread and misunderstood the tax code.

[hrheatherkay]

Inherited moms mobile home with my sister

[Critter-3]

@hrheatherkay 

That's nice ... did you sell it ?   Or keep it ?