tax question about gifts

For future reference, by the time you're looking at a transaction in the rear-view mirror, it's usually impossible to affect the tax treatment of it. The time for asking these questions is before you act, not after.

Your wife may want to work with a tax professional to make sure that she correctly determines her taxable gain from these transactions.

After the transaction is completed, it is what it is. Planning is done before the transaction is completed, with your CPA/ taxadvisor & attorney.

___________________________________

-----> real address on hobokeni or hobokenx

You say "trees and easement". Hopefully, you know how much for which. Presumably, you didn't sell the whole property. Unless your basis is less than the price paid for the easement, all you have is an adjustment to basis. When you sell, your capital gains (if any) will go up by the amount of the easement. (If you DID buy the property for less than you got for the easement, the _difference_ is capital gains now, and your basis when you eventually sell will be zero).

I have no recommendation for the tree income. You might be able to treat it as capital gains and deduct the original purchased value (or installation cost) of the trees, but timber rules are extensive and specialized. Unless it's large enough make it worth seeking out a professional, I'd treat that part as ordinary income.

Martin

I thought the IRS took the position that you need to prorate the basis to determine the basis of the easement, and then pay tax NOW. Why anyone would do this, unless the easement sold for a ton of money, is beyond me.