Give Cottage Share to Daughters

Each you and your wife can give $11K to each of the daughters each year. That $44,000 per year. How much is your wife's share worth? A good tax accountant might find a way to slide in an installment of this for 2004 given that we are not at April 15 yet. If that was workable, you'd be at $88,000 already.

You could also just hang onto it, and put it in your will. That would allow you to transfer it on your wife's death without tax issues (in many states, at least).

-john-

Don't forget a fact that seems to often be misunderstood about the gift tax $11,000 exclusion is that while gifts larger than that amount "become subject to tax" this does not mean that any tax is necessarily ever actually paid. It is just that now the excess becomes part of the lifetime gift and estate tax exclusion. Depending on the situation regarding total wealth and estate planning this may be an important concern or may be absolutely of no concern. There is the difference that gifts over $11,000 will kick off filing a gift tax return.

Thanks John and David.

$11K gifting will take a few years--we're "lucky" enough to have Great Lakes lakefront. It would be nice to get it out of the estate tax pool as soon as possible.

Dick

David B. Redm :>In article , :> Prof Reid wrote: :>

:>> My wife would like her third to go (now) to the two :>> daughter-joint-owners so that they'd each own half. :>> :>> Is there a good method for this transfer? One :>> that wouldn't need to be stretched out using :>> $11,000 yearly gifts, and wouldn't require gift tax, :>> nor be counted against the estate tax exemption amount? :>

:>Each you and your wife can give $11K to each of the :>daughters each year. That $44,000 per year. How :>much is your wife's share worth? A good tax accountant :>might find a way to slide in an installment of this :>for 2004 given that we are not at April 15 yet. If :>that was workable, you'd be at $88,000 already. :>

:>You could also just hang onto it, and put it in your :>will. That would allow you to transfer it on your :>wife's death without tax issues (in many states, at :>least). :>

:>-john-

: Don't forget a fact that seems to often be misunderstood about the : gift tax $11,000 exclusion is that while gifts larger than that amount : "become subject to tax" this does not mean that any tax is necessarily : ever actually paid. It is just that now the excess becomes part of : the lifetime gift and estate tax exclusion. Depending on the : situation regarding total wealth and estate planning this may be an : important concern or may be absolutely of no concern. There is the : difference that gifts over $11,000 will kick off filing a gift tax : return.

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Have you sought out any professional advice on this item? I am under the impression that the government as scaled back and eliminated many forms of estate taxes. I believe that estate taxes on real estate does not kick in until you have $1.1-million in value (but I do not know any of the details). What I do know that is by gifting the home when you are alive, your children retain your basis value. If you transfer at death, they get a stepped up basis value. That means that if they ever sell the place, they will pay far more in capital gains than if you allow the property to transfer upon your death via a will. Your trick could backfire and actually cost them far more in taxes than what they would otherwise have to pay.

-john-