Tax on Father's investment property - Posted by Frazier

Posted by JHyre in Ohio on April 03, 2002 at 05:52:27:

You could have him gift it to you…that may cause immediate or eventual gift tax liability for him…you get the property at his low basis, with no gain. He could gift it over time, avoiding income tax and gift/estate tax implications. Taking it subject to a loan that he placed on the property would get you a basis equal to the loan, though that would create gain for him. No comment on IRA.

John Hyre

Tax on Father’s investment property - Posted by Frazier

Posted by Frazier on April 02, 2002 at 07:40:38:

My father has two investment properties that he would love to give to my wife and myself. Over the past twenty years, he has depreciated them to the point where the basis is 0. My understanding is that if we have to buy them at FMV because we’re family and, if we do that, he’ll be hit with the capital gains tax. Two questions: (1) If we took the properties “subject to”, would the same principle apply? (2) Could we establish a self-directed IRA and have it purchase the properties for less than FMV? Is a self-directed IRA of a child considered “family” of the father? What about establishing a self-directed IRA for our child? I’d appreciate any suggestions. Thanks.