Ask the Piggy Bank: Is a Home a Good Gift?
As the holiday gift giving season moves into seriously high gear, one of the questions I have received is whether or not a home is a good gift. So I thought now might be a good time to address it.
Just so you know, I am not a tax attorney, or a professional (like Taxgirl is), but I am aware that there are consequences to such a gift. Namely, the consequences to the recipient.
First of all, once the gift is given, the tax basis of the home shifts to the recipient. That means he or she is left paying taxes on any gains (although there are ways to mitigate this to some degree) when it comes time to sell. And there are state income taxes to consider as well.
Another thing to keep in mind is that if the person already owns a home, the gift may be a burden in terms of costs of upkeep on this second home. And while it may be a god-send for a first-time home owner, it is also important to determine whether or not a mortgage is still outstanding on the property, since this can affect the recipient as well.
Bottom line: Before you give a gift like a home, consult with a real estate and/or tax attorney. And ask the recipient ahead of time as well. This is a decision that the recipient should be in on — this is not the sort of gift you should surprise someone with.
Tags: ask-the-Piggy-Bank, holiday-gift-giving, home-good-gift, Personal Finance, taxgirl, yielding-wealth-tax-consequences-giftsRelated Stories
POSTED IN: Family finances, Personal Finance, Real Estate, Taxes
0 opinions for Ask the Piggy Bank: Is a Home a Good Gift?
No one has left a comment yet. You know what this means, right? You could be first!
Have an opinion? Leave a comment: