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by CareyBot

DEAR BOB: My son and his wife live in a free-and-clear house I own. He pays utilities and maintains the property. He proposes I add both their names to the title so that in 24 months we can sell the property and he would then purchase in his name only a more expensive home. My son says no tax will be due on such a sale under that $500,000 tax exemption rule you often discuss and the sale isn't even reportable to the Internal Revenue Service. I realize I would be passing on the value of the home to him but I am not confident of the tax situation. Is he correct? --James S. DEAR JAMES: When you gift the house to your son and his wife, that event requires you to file a federal gift tax return. However, no gift tax will be due if your total lifetime gifts exceeding the annual $12,000 per gift p...