Question

primary residence

Forum|Forum|3 years ago
November 16, 2022
1 reply
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I want to give my child my second house. What are the tax implications? Also, if this house will be her primary residence, will she have to pay capital gains tax when she sells the home?

M

Mycharo1

When you gift money or property of more than $16,000 in 2022 ($17,000in 2023) then you should file a gift tax return reporting the gift.

Your daughter will not need to report the gift on her tax return when you gift it to her.

When your daughter sells the property in the future, she may have to pay taxes on the Gain she realizes on the sale of the property. There are special rules for the sale of gifted property There are three things the daughter will need to keep a record of:

The donor's adjusted basis just before the donor made the gift.
The fair market value (FMV) of the property at the time the donor made the gift.
The amount of any gift tax paid on the gift

If she sells the property, she will need these amounts to determine if she has a taxable gain on the sale.