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My father owns a property (approx. value $175000) he owes $60000. He wants to gift the property to me. 1. Can I pay (or give him the money to pay) the remainder of the mortgage and have him gift the house in its entirety? What are potential Gift tax issues?

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    Let's see now; you want to gift your father $60K to pay off the mortgage and then he will gift to you a house worth $175K? In the US, both gifts would be liable to incur gift taxes. – Dilip Sarwate Feb 21 '15 at 19:50
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Why not just buy it from him for $60K? The discount you'll be getting from FMV should go on your fathers' gift tax return (the $115K), and your father won't be able to claim a loss (since its a related party transaction), but your $60K will not be considered a gift.

  • I think that may be the option. Will he actually get taxed on the 115K? WI does not have a gift tax, so I assume he will get taxed for income. I am confused about the federal gift tax. 13k is exempt, but is will fall under the 5M life time. Can he and my mother gift 13k to each of our family members? There is 5 of us That would be 13k x 2 x 5 = 130k. If that is the case does everyone have to be on the deed? – Brian Feb 22 '15 at 0:43
  • @Brian you cannot split a gift - unless it gets titled to all 5 of you together. Think if that's what you want. Talk to a tax adviser (EA/CPA licensed in WI) for best advice on your options here. Getting free advice on the Internet is very likely to cost you more than what you'd pay to a professional. – littleadv Feb 22 '15 at 0:53

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