Tax Question
I recently sold a property, not my residence but a rental property, can I give a gift of say 5,000.00 to my Brother and sister who live out of state and write it off? I live in NJ Sibs live in Nevada and Georgia.
Thanks for any replies
This can be a little touchy, but if the gift don't produce deductions for the donor or income for the recipient. And most of the time there's no gift tax, either.
Except gifts to qualifying charities.
The gift tax is a tax on the transfer of property by one individual to another while receiving nothing, or less than full value, in return. The tax applies whether the donor intends the transfer to be a gift or not.
The gift tax applies to the transfer by gift of any property. You make a gift if you give property (including money), or the use of or income from property, without expecting to receive something of at least equal value in return. If you sell something at less than its full value or if you make an interest-free or reduced-interest loan, you may be making a gift.
The general rule is that any gift is a taxable gift. However, there are many exceptions to this rule. Generally, the following gifts are not taxable gifts.
1. Gifts that are not more than the annual exclusion for the calendar year.
2. Tuition or medical expenses you pay for someone (the educational and medical exclusions).
3. Gifts to your spouse.
4. Gifts to a political organization for its use.
In addition to this, gifts to qualifying charities are deductible from the value of the gift(s) made.
Making a gift or leaving your estate to your heirs does not ordinarily affect your federal income tax. You cannot deduct the value of gifts you make (other than gifts that are deductible charitable contributions).
I would suggest going to: http://www.irs.gov/publications/p950/index.html
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