Discussion:Rental Gift
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Discussion Forum Index --> Tax Questions --> Rental Gift
| 23 March 2006 | |
| I have a client (husband and wife) that would like to gift their rental that has a fmv of $280,000 to their daughter. Do they have to do a gift tax return, and if so, will they have to pay anything? What happens to prior depreciation, does it need to be recaptured? Any other suggestions would be greatly appreciated.
Thank you very much Sally | |
Chris2lane (talk|edits) said: | 23 March 2006 |
| Piggybacking on Dennis' response, the full amount of the donor's depreciation recapture must also be passed on to the donee. At the time the donee sells the property, the recapture rules require that any cost recovery be added as taxable ordinary income. | |
| 23 March 2006 | |
| If purchased after Oct. 1986 MACRS would have been used. There would be unrecaptured 1250 which would be taxed at maximum rate of 25%. | |
| 24 March 2006 | |
| This is probably my day to relearn. I may be misapplying 1250b but if straight line was used and held for more than 1 year recapture is not necessary under MACRS. (residential real prop) I think S/L deprec is required for resid real prop therefore should be no excess over s/l.
from 1250(b) ...except that, in the case of property held more than one year, it means such adjustments only to the extent that they
exceed the amount of the depreciation adjustments which would
have resulted if such adjustments had been determined for each
taxable year under the straight line method of adjustment.
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