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Annie, a US citizen, has 2 houses (around $60K each) to give to her family members and try to avoid or minimize gift tax. She would like to give (a) one to her mother, a US permanent resident; and (b) the other to her sister Bonnie and Bonnie’s husband, both Vietnamese and live in Vietnam.

I have read all posts about gift tax but still have these questions: 

  1. Is (a) possible? If so, how to minimize the gift tax?

  2. Is (b) possible? If so, how to minimize the gift tax? 

  3. When you sell real estate, you do “closing”. What and how do you do when gifting real estate? And what if gradually over time? What professional would handle this? How much does it cost? Can you DIY? Hints?

  4. What if Annie and her husband both owning the houses and they both agree to give?

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For 1 and 2, there are no legal residency requirements that I'm aware of in the United States to own real estate. You can give real estate to whoever wants to accept it from you.

Depending on Annie's expected estate size at death, there may not be any gift tax to worry about. The lifetime exclusion is currently in excess of $11 million; unless she dies with an estate greater than that, she won't have to pay tax on the gifts you're talking about. Read more about the gift tax here.

Skipping to 4, if Annie own's the property jointly with her husband, then he must agree to the sale. And in this case the annual maximum amount of the gift to the recipient is doubled.

For 3 - seek out a real estate attorney. You don't need a real estate agent. If you truly want to gift the homes, your lawyer could likely draw up a seller-financed purchase agreement. Instead of accepting an annual payment for the purchase of the homes by your gift recipients, you could forgive the repayment from them each year until whatever fair sales price was due had been forgiven at a rate of 15k or 30k per year (based on whether the gift is coming from Annie or Annie and her husband.) In the case of the gift to the couple, the exclusion could be $30k or $60k since each member of the recipient couple can receive a gift from each member of the giving couple.

  • Thanks. Since these are sales, so does Annie have to pay both sale tax and income tax for the sales if sale price higher than purchase price? – ngungo yesterday

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