Will Removing Son from Deed Result in Gift or Inheritance Tax?
Full Question:
Answer:
Inheritance taxes are taxes levied on the value of an estate when it is passed to heirs upon the death of its owner. They do not apply to transfers made while the owner is alive.
Any transfer to an individual, either directly or indirectly, where fair market value is not received in return is considered a gift. The general rule is that any gift is a taxable gift. However, there are many exceptions to this rule. Generally, the following gifts are not federally taxable gifts:
-Gifts that are not more than the annual exclusion for the calendar year.
-Tuition or medical expenses you pay for someone (the educational and medical exclusions).
-Gifts to your spouse.
-Gifts to a political organization for its use.
The current federal annual exclusion is $13,000 for individual gifts or $26,000 for gifts by spouses. However, the gift tax will not apply until you give away $1,000,000 in your lifetime.
On or after January 1, 2005, persons making Connecticut taxable gifts (donors) will be required to file a return with the Department of Revenue Services (DRS) reporting even though no gift tax may (or may yet) be payable. Connecticut gift tax will not be payable until the sum of Connecticut taxable gifts made during all years beginning on or after January 1, 2005, exceeds $2 million. Connecticut taxable gifts are those federal taxable gifts that are gifts of real or tangible personal property situated within Connecticut (and, for donors who are Connecticut residents, gifts of intangible personal property).
