Stockton, CA asked in Real Estate Law for California

Q: My wife and I have a rental property free and cleared would like to gift/transfer to my nephew without paying too much

tax and completely removed our names off the property. The property is located in Stockton, CA.

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1 Lawyer Answer
Jonathan Purcell
Jonathan Purcell
Answered
  • PETALUMA, CA
  • Licensed in California

A: You may gift up to the value of the annual exclusion, which is currently $15,000 per year, without the donor or recipient filing with the IRS. A married couple may donate twice this much to the recipient. If the recipient is married, and the donor is married the recipient may receive four times the annual exclusion or $60,000 per year in value without reporting the donation.

A gift for more than this amount would require a filing of

IRS Form 709: United States Gift (and Generation-Skipping Transfer) Tax Return,

which would likely require an attorney.

Form 709 will not impose immediate tax liability on the donor or recipient. Upon the death of the donor, the lifetime gifts and taxable estate will be combined. In the event the combined amount exceeds the exclusion then in effect, the excess would be taxed. Under current law, tax liability is unlikely.

Regarding transferring the property, you might have a conversation with a local title company.

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