- quote -

But the value then would likely have been lower, too.

Still, $20,000 is more than $18,000.

If both children were married then, the limit doubles
_again_, so it would have been $40,000 ($44,000 more
recently).

Seth

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Seth Breidbart wrote:
- quote -

Not necessarily since the property sounds like it was
conveyed several years ago, when the limit was 20,000$, you
reckon?

Cheer$,
Harlan Lunsford, EA n LA

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Seth Breidbart wrote:
- quote -

Form 709-A has been discontinued, so they have to FILE
form 709 to split the exemption, even if there are no
gift or estate tax consequences.

Depending on the form of ownership of the property....

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sethb[at]panix.com (Seth Breidbart) wrote:
- quote -

Yeah, that's the limit. But unless they're in a community
property state or each of the parents was considered the
owner of half of the property under state law, they'd have
to file an election to split the gift.

Stu

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Arthur Kamlet <ArtKamlet[at]aol.REMOVE.com> wrote:
- quote -

Why? Isn't the limit for a couple's giving $22,000?

(OK, the property might have seriously decreased in value
since the gift, or they might have given their children
other gifts the same year, or, . . .)

Seth

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markrstephen[at]hotmail.com (Mark Stephen) wrote:

- quote -

Thanks everyone for your advice !

Mark.

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"Mark Stephen" <markrstephen[at]hotmail.com> wrote:

- quote -

First, as a gift, your wife's basis in the property is the
same as her parent's basis in the property.

Second, as a gift, your wife's holding period includes the
time her parent's held the property.

Third, this should be treated like the sale of any other
asset. Start with the sale price, reduce it by the basis in
the property, reduce it by any settlement or sales costs,
what's left is essentially the gain (or loss) to be
reported.

Fourth, regarding NY - You will have to file a NY tax return
and pay NY tax on the gain belonging to NY. Hopefully, NY
has already withheld enough tax so that you will get a
refund, but you might owe tax depending on the facts and
circumstances of your case.

Fifth - You will have to report the sale on your CA return
as well. I believe CA requires residents to report and pay
tax on ALL their income. You may be able to claim a credit
on your CA return for the taxes you pay to NY. I haven't
done a CA return with an out of state return in years so I
don't recall the details.

Sixth, you only need to make an estimated payment if not
making one will subject you to an underpayment of estimated
tax penalty. There are two ways to beat this penalty and
pay the balance due when you file the return. For my
clients, I almost always recommend that they make the
estimated payments right away to make sure they don't spend
the money needed for taxes later only to find out they are
short - in which case other penalties like late payment of
taxes might apply.

Finally, it sounds like you usually prepare your own return.
I would strongly urge you to consult with a professional.
You have multi state issues, with nonresident tax credits,
and estimated tax payment issues. It would behoove you to
work with a pro to make sure you get it right. Considering
the sale took place in 2004, I would really suggest you have
your 2003 return done by a pro and have that pro do some
2004 tax planning to factor in the effect of the sale.

Good luck,
Gene E. Utterback, EA

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Mark Stephen <markrstephen[at]hotmail.com> wrote:

- quote -

When they gave her the property, the gift was not taxable
income to her. Parents might be liable for filing a Gift
Tax declaration, form 709, however.

Assuming it had appreciated since parents acquired it 30
years ago, she gets a basis of half her parent's basis and
same acquisition date of parents. Add any capital
improvements and costs of sale to the basis. The difference
between her portion of the sale and her basis is a long term
capital gain, reported on scheudle D. Each sibling would
report half the sales price if the title agency or whoever
prepared the HUD-1 statement did it right.

__
Art Kamlet ArtKamlet [at] AOL.com Columbus OH K2PZH

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- quote -

If the parents gave the property to your wife and sibling
then your wife's basis in the property is her parents old
cost basis from 30 years ago--which is most likely quite
low. The gift of the property was not a taxable event to
your wife. But the gain upon its sale is a taxable event.
The gift brings with it its holding period making the event
a Long Term gain. EG if the per share basis was $1000 then
there would be $17000 LT Gain. (If rented and depreciated
while you held it there would be some depreciation recovery
math as well)

I do NOT know if you are subject to any NY taxes on propety
sold within NY--my guess would be yes but you get a credit
against your CA taxes for same. Wait until somebody more
knowledgeable about NY posts.

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My wife was just given a check for the sale of a property
that her parents bought about 30 years ago and when they got
divorced gave it to my wife and her sibling. They decided to
sell it and each received about $18K.

What I dont understand is how to treat this, should I
consider this a normal capital gain, a simple gift, or is
there some special catagory it falls under ? Would I need to
make an estimated payment on the proceeds or just wait until
next year when I file (the sale went through Jan 9th) ? We
live in CA and the property was in NY, who already took out
a chunk (I think 7%), since we dont live in NY can we file
next year to get this amount back ?

Thanks for any info,

Mark.

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