Sold my home gifted equity to my daughter

Forum|Forum|1 year ago
October 23, 2024
2 replies
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I sold my home and gifted most of the earnings to my daughter to buy her own home. I know it doesn’t effect my disability, but what will I have to pay?

Not A Product Question

DoninGA

Employee

This was a gift to your daughter. Gifts given and received are not reported on a tax return. Your daughter does not report the gift received on her tax return. Assuming that gift given was greater than $17,000 in 2023 you are required to file a gift tax return using IRS Form 709.

TurboTax does not support IRS Form 709.

Go to this IRS website for the Form 709 - https://www.irs.gov/forms-pubs/about-form-709

The total of all gifts ever given must be greater than $12.92 million for 2023 before a gift tax is assessed.

xmasbaby0

Employee

The fact that you gave the money to your daughter has no effect on whether you might owe tax on the sale of the house. You might--or might not---owe tax on the sale.

If your gain was more than $250,000 filing Single, or more than $500,000 filing Married Filing Jointly the sale must be reported on your tax return. Whether you re-invested the gain in to another house is irrelevant. If you have a Form 1099-S go to Federal>Wages and Income>Less Common Income>Sale of Home (gain or loss)

If you owned and lived in the home as your primary residence for at least 2 of the last 5 years on the date of the sale, you do not have to report the home sale if the gain is less than $250K filing Single, or less than $500K filing Married Filing Jointly (and you both owned and lived in the home for at least 2 years).

If you are using online TT, you need Premium software to report the 1099-S

NOTE: If you have ever used the home as rental property or claimed a home office, you have more information to enter

**Disclaimer: Every effort has been made to offer the most correct information possible. The poster disclaims any legal responsibility for the accuracy of the information that is contained in this post.**

Opus 17

Employee

It sounds like you didn't give equity, which would mean giving her an ownership stake in the house. It sounds like you were the only owner, you sold the house, and you gave her cash. (The cash might have come from the equity, but it was a cash gift after the sale.)

In that case, they are two separate things. You owe capital gains tax (or not) based on the rules for paying tax when you sell property. There is a tax break if this was the main home you lived in, but you might still owe tax depending on the amount and circumstances.

Then, if you give a gift of more than $18,000, it must be reported. However, tax is rarely owed unless your lifetime gifts to all recipients total more than $13 million.

I think the other experts have provided links to the instructions.