Phil Marti <prm20871[at]verizon.net> wrote:
- quote -

I disagree. Because it's a gift sale, their sale price for
tax purposes is the appraised value (though I'd suggest
deducting the typical 6% real estate agent fee, to better
reflect what they'd _receive_ in a true arm's length sale).

Seth

<< ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2006) - All rights reserved. > << ================================================== ===== >

"chaddell[at]microsoft.com" <chaddell[at]gmail.com> wrote:

- quote -

Door number 3. Their basis is usually what they paid for
it, plus any capital improvements. Their sale price is
$350K. Their gain is the difference, adjusted for selling
expenses.

If the condo was their personal residence for 2 of the 5
years preceding the sale, none of the gain would be taxable
(IRS Publication 523).

They do have to file a gift tax return for the $65K gift.
Assuming that they've made no taxable gifts before, the tax
will use a portion of their unified credit, and no tax will
be payable.

--
Phil Marti
Clarksburg, MD

<< ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2006) - All rights reserved. > << ================================================== ===== >

I'm attempting to purchase a condo in the state of
Washington from my parents. The appraisal for the condo is
415k. In order to help me with the financing (less than 90%
LTV loan) my parents are willing to do a gift of equity of
65k - making the amount I need to finance 350k and thus
making the rates more favorable to me.

My question is this: Will my parents basis for tax purposes
then me 415k, or 350k. I'm wondering if they'll be on the
hook for the capital gains on the gifted amount? I realize
that they will be on the hook for excise tax of 1.78% in WA,
and that's not a problem, however, 15% for Cap gains would
be a different story.

Thanks!

Chad

<< ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2006) - All rights reserved. > << ================================================== ===== >