AboutJohn 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
Question I'm trying to determine if there is a tax consequence on a gift of equity. My father in law is selling his house to my wife (his daughter) and I for less than market value. My understanding that any amount over the normal gift ($13,000) per person, will be considered a gift. From further reading it appears that this tax would be on my father-in-law, the donor, not us the receivers of the gift of equity. For example purposes, the gift of equity will be about $100,000. It also appears that this amount may not be subject to tax if reported by my father-in-law as part of a $1,000,000 exemption. Can you please clarify this exemption and how it should be properly reported. Does this $1,000,000 exemption mean that he is allowed to gift up to $1,000,000 in his lifetime outside of the annual allowance to all others combined? Thanks for your help!
Answer Todd,
Thanks for your question.
The $1,000,000 exemption is his lifetime exemption above and beyond the $13,000 annual per person exemption.
Since the gift exceeds the annual exemption, he must file a 709, Gift Tax Return. However, since he has not used up his lifetime exemption, no tax would be due.
