Gift real estate, save on taxes

Future-Proof: Navigate Threats, Seize Opportunities at ICNY 2018 | Jan 22-26 at the Marriott Marquis, Times Square, New York

Editor's note: Robert Bruss is temporarily away and will return next week. The following column from Bruss' "Best of" collection first appeared Sunday, June 25, 2006. DEAR BOB: My son and his wife live in a free-and-clear house that 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 g...