Gift of 1/2 Rental

[S T]

Thinking out loud

Father and son own a rental unit. Father wants to gift his percentage to son.

Cost = $93,000, Adjusted basis $33,000 FMV = $200,000

So a transfer of title can accomplish transferring to son, and a gift tax return, correct? Father does not have to report any capital gains in the transaction or recapture of depreciation?

Son would take fathers adjusted basis of $33,000?

Sandy

[Snaggletooth]

I vote Yes

Sandy I vote YES on all your questions. I don't think father would have to recapture any depreciation, but if I am wrong about this, I hope someone will correct me.

[Roland Slugg]

No recapture

The only time there is recapture upon the disposition of real estate is when real estate placed in service before 1987 is sold at a gain, and the taxpayer used an accelerated method of depreciation.

Yes, a gift tax return is required to be filed for the year the gift was made.