Q: In California, 50/50 joint tenancy when one party wants to gift his share of interest to the other party

A: I agree with James's response and would like to add that the current lifetime gift and estate tax exemption is $13,990,000 for individuals and $27,980,000 for married couples in 2025. You will likely want to use a portion of this lifetime exemption to facilitate the property transfer, assuming your share of the property is not over the exclusion amount.

Be sure to inform your CPA so they can properly report the transfer on your Form 709.

A: When you're gifting your share of joint tenancy property in California, there are several tax considerations to keep in mind. The giver may need to file Form 709 if the value of their gifted share exceeds the annual gift tax exclusion limit, which is $18,000 for 2024. However, this typically doesn't result in immediate tax payments due to the lifetime gift tax exemption.

For the receiver, accepting the gifted share generally doesn't trigger immediate income tax obligations since gifts aren't considered taxable income. The receiver inherits the giver's cost basis in the property, which becomes important when calculating capital gains taxes if they decide to sell the property later.

One critical point to consider is property tax reassessment. Under California's Proposition 19, transfers between co-owners might trigger partial reassessment of property taxes, potentially increasing the tax burden for the remaining owner. You should carefully document the gift transfer with proper legal documentation and consider consulting with tax professionals to ensure proper reporting and minimize any potential tax implications.