Legal Question in Tax Law in Wisconsin

Re: Gift Tax Question

The difference between the fair market value of the

property your parents are selling you at a bargain

price and the actual price is a gift. The annual exclusion

between one donor and one donee is $10,000 in 2001 and

is projected to become $11,000 in 2002. Husbands and

wives may join to combine their gift tax exclusions. That

means that your parents could each give you the annual

exclusion amount. If you have a spouse and they

transfer the property to both of you, they could combine

their exclusions for her as well. The difference comes

off your parents' combined lifetime and death exclusion, which

was $675,000 for 2001 and is now $1,000,000 for each of

them for 2002. If you are into this area, even though

there is no tax, a return is required.