Members of the Maryland Association of Certified Public...

TAX ANSWERS

April 01, 1995

Members of the Maryland Association of Certified Public Accountants are answering readers' tax questions through April 15.

Q: My father, a widower, no longer wants to live in his house alone. He took an apartment and had his attorney put his older child's name on the deed. I am the younger child, and my sister gave me $50,000, which is half the value of the house. Are there any tax consequences?

A: Assuming that your father made [the house] a gift to your sister, and she made a gift [of the money] to you, both she and your father would have to file gift tax returns for the year. If, on the other hand, your father sold half the house for $50,000 (which was given to you) and gave the other half to your sister, he would then report the sale of half of the house on his income tax return. Then he would file a gift return showing two $50,000 gifts. In either case, there would not be any tax consequence to you. Gifts and other transactions between relatives can be very complex and can have far-reaching tax consequences if not handled and reported appropriately.

The above advice is for general purposes only and is not intended as legal, accounting or tax advice. Specific situations may vary.

To submit a question, call Sundial, The Sun's telephone information service, at (410) 783-1800. In Anne Arundel County call 268-7736, in Harford 836-5028, and in Carroll 848-0338. Using a touch-tone phone, enter 6225 after the greeting. Push 1 to submit a tax question; state the question in full. Push 2 to hear a tax tip. Selected questions will be answered in the Business section. No questions will be answered by phone. Please leave your name and phone number.

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