Gift of cows

[oceanlovin'ea]

Can a parent give her child some cows and equipment as a gift? TP has a few cows and a tractor, cow trailer. She is now retired and doesn't want to have to keep doing tax returns only due to the cows.

She wants to give them to her son. Value of cows about $12,000 and the basis in the equipment about $5000. We would have to do a gift tax return or give part of the cows to his wife.

From the farm standpoint is there any negative consequences to doing this?

Linda, EA

[Bees Knees]

Well, how does the cow feel about being given away?

I don't see any reason why there would be a problem with gifting the cows. Basis in a gift is the donor's adjusted basis prior to the gift.

[Davc]

And for gifting purposes the FMV of the equipment is the value of the gift. Basis to the recipient is the giftor's.

[JohnH]

If there were still any doubt, she could always sell the cows and equipment to the son, then forgive the debt over a couple of years. Thus keeping everything below the annual "moo-lah" limits.

[erchess]

Can't find any Bull here

but my Bull detector keeps insisting there is some.

[oceanlovin'ea]

There is no bull here.

She is an older lady who husband died a couple of years ago. They had some cows. He took care of them when he was alive. For the past couple of years she had to do it. But it is too much work for her. Plus she gets social security only and wouldn't have to file if not for the cows.

She wants son to take them over. So I told her I would check to see what is the best way to do this. she would probably still go out and help him feed them and check on them but he would have the responsibility of taking them to sell, etc.

I think she should give them and the equipment to son and to his wife. That would settle the matter in one year.

Linda, EA

[erchess]

Sorry Linda

Was just having a little fun with the idea of cow and bull.

[oceanlovin'ea]

it is funny.......my exploding head can't think straight.

This lady is funny too. I really like her. Sorry to lose her as a client.

Linda, EA

[Y2KEA]

Dairy cow?

If you gift a dairy cow, what part of the value is attributable to the sales inventory in the udder?

[JohnH]

The udder part, of course.