Discussion:Gifting of 1031 replacement property
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Discussion Forum Index --> Tax Questions --> Gifting of 1031 replacement property
Lchangcpa@pacbell.net (talk|edits) said: | 6 February 2006 |
| Client completed a 1031 exchange in 11/04, and received the replacement property with all capital gain defereed into this property. She rented the property to her son, since acquisition and has been charging him market rent. She is thinking about gifting this property to her son, along with outstanding mortgage, so that she can forgo all taxes on deferred gain. Of course, she will report the gift tax return for the net equity given. Would the strategy work? thanks,
Elim | |
| 6 February 2006 | |
| It is probalby too soon to talk about gifting. The Service will almost assuredly attack this transaction. I recommend applying for a private ruling on this; however, based on prior rulings, the Service will not issue a favorable ruling until the property has been rented for at least 2 years. | |
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