Impact of a gift of property and contents

[AndreP1]

My daughter, a graduate student, was gifted a condo and all its contents by a friend.

I understand there is no tax implication on the value of the condo until she sells it.

What about the contents?

We are donating almost all of it to various charities.

Should we keep track of the value in case the total exceeds the standard deduction of $12,500?

Also, she has to pay property taxes.

I assume the same applies, i.e., tax amount plus donation values need to exceed standard deduction to have an impact on taxes.

Finally, she only makes about $30K per year, so is all of the above moot since she will likely get refunded all of her federal taxes that was taken out of her pay anyway?

[KarenL4]

Hi,

Yes, you can potentially take a tax deduction for items that were gifted.  The donation value would be generally be the lower of (1) the Fair Market Value of the item or (2) its "Basis".

The "Basis" of an item that you received as a Gift is usually the original purchase price by the person who bought it.  The "Basis" of an item you inherited is the Fair Market Value of the item on the day that person died.

However, be aware that if the value was $250 or more, you may need certain receipts or other things in connection with the donation.  If the value if more $500 than for a non-cash donation, Form 8283 must be completed.  She also may run into income limitations.  Generally, you may deduct up to 50 percent of your adjusted gross income, but 20 percent and 30 percent limitations apply in some cases.

For your reference, here is the relevant IRS publication that has more detail on some of the ins and outs.

As to her income, the federal standard deduction for single person for 2022 is $12,950.  So, she may still have some tax to offset (even though it will be at 10%-12% federal tax rates). 

Please cheer below if this is helpful.

Best,
Karen