Can a person give a relative a house for no cost?
1 Answer | Asked in Real Estate Law for Pennsylvania on Aug 16, 2012.
Answered On Apr 10, 2013
Sure. However, a transfer without being paid full value is a "gift" and is, accordingly, subject to Federal gift tax if, as would be expected, the value of the house exceeds the permissible annual gift tax exemption levels or you fail to file a gift tax return and take this as a reduction against what otherwise would be future estate tax exemptions. If a qualified estates and gifts attorney is consulted, it is most probable that an appropriate return can be filed and no gift tax would be assessed. Also, there are other things in a transaction like this that would need to be discussed with the lawyer. The question, as phrased, is very simple and, as such, gets a simple one word answer. However, the transaction itself is not so simple.