Hello! My father in law is going to sell his rental condo and give the money to his two sons. I feel like I heard something about an efficient way to do this but I cannot find it now. He'll have capital gains on it, the property has about doubled in value and he has not lived there for two years. Can someone gift a property to their kids and then they can sell it? Or would it be the same tax for him to sell it and then give them the money? He is going to talk to a tax advisor but is still figuring things out. I thought I would ask here because I swear I heard in a podcast about a best way to do this kind of thing, but maybe I am just getting it confused with investment accounts. Thanks!
Giving property
vtorrr
12 XP
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3 replies
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jkinthedmv
378 XP8 months ago
It’s probably a good idea to talk to a tax professional. This article covers several scenarios: www.rocketmortgage.com
Roberto Sánchez
3,299 XP8 months ago
The main way that something like this would be advantageous would be in the case where your FIL happens to be in a higher capital gains tax bracket than his sons. So, if he has AGI of $750k, and thus lands in the 20% capital gains tax bracket, and his sons have AGI that puts them in the 15% capital gains tax bracket, then gifting the property and letting them handle the sale would be advantageous from a tax perspective. The same is true if FIL's AGI puts him in the 15% capital gains tax bracket and the sons are in the 0% capital gains tax bracket (say, if they are MFJ with an AGI of only $50k each).
If everybody is in the same tax bracket, then it would seem like it doesn't make that much of a difference either way.
Naturally, you'll want to verify with a real tax professional, as I am just some random person on the Internet.
vtorrr
12 XP8 months ago
Thank you, that was very helpful
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