Legal Question in Tax Law in California

Re: Gift Tax on Real Estate

The gift tax is on the donor and not the Donee (the receiver). The gift is subject to annual exclusion of $10,000 per donee. In addition each Donor (the giver) has a lifetime exemption of $675,000 this year and next so that no gift tax may be currently due. You should check to see if there is an outstanding mortgage. If the balance due is in excess of the donor's basis, then income could result to the donor on the amount of the excess.

Re: Gift Tax on Real Estate

Don't do it without speaking to an accountant or attorney first. Gifts are not subject to income tax. However, there is something called the gift tax. A donor can give up to $10,000 per recipient per year without tax. Given the size of the gift, you should speak to an advisor before doing anything.