What is the best way to transfer assets (property vs. cash)?
My father wants to sell his vacation home in which he will profit $300,000. He then wants to transfer $200,000 of that to his two children ($100,000 each). How can both parties (donor and donee) minimalize taxes? All options are on the table, including selling the house to his children far below market value for a price in which he gains his $100,000 and the children will then sell it for a profit of $200,000.
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Tags: Assets, Options, Two Children
vacation property | , 29 May 10
By ffperki, May 29, 2010 @ 4:46 am
You have left out some information. You have not said how much he paid for the vacation house. If he paid $100,000 for the house then he would not owe any money on the tax if he sold it to you all on the other hand if he bought the house for $100,000 and sold it for $300,000 that would give him a capital gain of $200,000 and that would most likely cost him about $45,000 in tax. There are a number of “if’s” in this I would make the suggestion that you all talk to the people that do your taxes. Other wise I would suggest that you guys buy the property from your father.