Gifting real estate to your adult children
Gifts have real, and often expensive, tax implications when it’s not just a little something that can fit under the tree at Christmas time. Substantial assets, such as houses for example, carry serious ramifications for both your taxes as well as the taxes of the recipient of the gift. If you’re intending to gift assets to someone, you should do some financial planning before going through with the transaction. Speaking with an accountant, can help you determine what taxes are involved, how they can be structured, and whether or not the transaction can be handled in a way that makes the taxes more manageable. And remember, once you gift something, it’s not yours anymore. Giving away a trust fund, or a house, means you have no control over that asset in the future.
“If the tax payable to you today is modest, it may not be that costly to make the transfer. And it means future growth in the property value, which would otherwise trigger more capital gains tax on your death, would instead take place in your daughter’s name.”