Tax Law (Questions About Taxes)/Gift or Taxable Income?

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Question
I hold a $75,000 recorded mortgage on my daughter's home. I want to eliminate the mortgage so she will own the house free and clear. Of course, I want to make this a tax-free transaction for her. I was thinking of filing a "Satisfaction of Mortgage" with the County Clerk's office which would update the mortgage as "paid" on their records. I would then file a gift tax return for the entire amount (less the  $14,000 annual exemption) with the IRS by April 15, 2016. Would the IRS then consider this transaction to be a non-taxable gift or would they treat it as a forgiveness of a debt, which must be included in my daughter's income for 2015? Thank you.

Answer
It is a non taxable gift. You get the same result if you gave her 14k and she paid you back. No?

The 14k is per person per year.  If she is married yiu can give her husband 15k too. Same for kids.

This year 2015 and next 2016.

If you are married you can include your wife too.  

Called gift splitting.  Perfectly legal.

Good luck and have fun.  Nice daddy. You are a good man.

P  

Tax Law (Questions About Taxes)

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Tax and general business including hospitality related (hotel mgmt degree and experience in industry prior to obtaining ms tax and cpa).

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19 years cpa. ms tax. NOTE: My discussions are only a general information and do not constitute tax advise without entering into a specific agreement and executing an engagement letter; This free chat is nothing more than general information and should not be construed as tax advice nor does my response or replies imply an agreement to provide client specific advice or other guidance for purposes of avoiding IRS tax or penalties and should not be relied upon without your own validation and confirmation of the how the discussion may fit your facts... Not having all the facts and/or not having a direct client relationship prevents me from providing the most accurate replies as possible and I highly suggest using a local CPA to provide you with written advice and guidance. Taking matters into your own hands is much akin to trying to land an airplane without a license. It is easy to FLY a plane, but LANDING is when critical experience is key. In short, caveat emptor; do your homework and don't just rely on free chat board advice anywhere, anytime.

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