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About John Stancil, CPA
Expertise
I can answer questions on personal income taxes, partnerships, and some corporate income taxes. I can deal with some state tax questions. Limited gift and estate tax questions. I am also familiar with ministerial and church tax reporting issues. I teach tax and accounting at a small church-related college. Sales taxes and property taxes are state and local issues so I am not likely be be able to give you an in depth answer on those types of taxes. I have maintained a part time tax practice for over 30 years. I am a member of the AICPA, National Association of Tax Professionals, and the Institute of Management Accountants. Visit my website at www.johnstancilcpa.com. Also visit my blog, www.thetaxdocspot.com.

Experience
I hold a doctorate in Accounting, and four professional certifications: CPA, CMA, CFM, and CIA. I passed all certification examinations on the first attempt, and received honorable mention for my scores on the CIA exam. I write a monthly tax column for the local newspaper. I have prepared taxes for over 30 years.

Education/Credentials
DBA University of Memphis MBA University of Georgia BS in Accounting Mars Hill College

You are here: Experts > Business > Corporate Law > Tax Law (Questions About Taxes) > Gifting a 1031 property

Tax Law (Questions About Taxes) - Gifting a 1031 property

Expert: John Stancil, CPA - 11/9/2009

Question
QUESTION: For three years my husband and I have owned a rental property we bought as a 1031 exchange. We paid $240K for it and now the area is suffering severe hardship from several industries shutting down. We can't rent it, and don't know if we could sell it if we tried. We would like to give this property to our daughter. Is there a tax problem with doing so? Thank you for your help.

ANSWER: Karen,

Thanks for your question.

No tax problem if you follow all the procedures. Since the gift exceeds the annual exemption amount of $13,000 each of you would need to file a gift tax return. However, since each of you has a lifetime exemption of $1,000,000 there would likely be no tax (unless you had already used up your exemption).

Your basis in the property would transfer to her since it is a gift, unless the FMV is less than your basis. In that case the FMV would be the basis for loss when she sells it and your cost would be the basis for gain.

Hope this helps.

John Stancil, CPA

---------- FOLLOW-UP ----------

QUESTION: Does the $1,000,000 lifetime exemption mean all gifts--no matter who receives them? I know the $13,000 can go to one or several people, but I wasn't sure if you could give several people $1,000,000 or if that was the total for a person's lifetime of giving. (Not that we have that kind of money, but was curious about it.)

Answer
The $13,000 is an annual exclusion and can be given to an unlimited number of individuals. It is was is referred to as a non-taxable gift.

The $1,000,000 is your personal exemption for taxable gifts over your lifetime. It includes any gifts that exceed the annual exclusion amount.

Hope this helps.

John Stancil, CPA

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