Senior gifting money /avoid taxes for both involved
My 84 yr. old mother recently sold her house and would like to give certain grandchildren a monetary gift. She had to sell so she could move in with me so I could take care of her. By doing this she will not lose her caretaker that she gets part time because she is low income and is in need of assistance. She sold the house for 159,000 but walked away with 137,000. Is there a way to do this without either party to not pay taxes on the gift? Or can we just transfer the money into the accounts without a form? I understand there is a gift tax but also understand there is a liftetime gift tax which is obviously not the going to reach the dollar amount in this situation. Please give your advise. Thank you.
Terry Says
I’m assuming that for sure there will be no taxes on the sale of her house — because of the $250,000 tax exemption on gains from the sale of a residence.
Second, I’m assuming you did your homework — and that she still qualifies for her low-income caretaker. In many states, assuming this is state aid, there is an asset waiver. A home might be an exemption, but if $137,000 is seen in her bank account, she would be disqualified! And that could happen, even if she gives a lot of the money away!
She can give $17,000 a year, every year, to as many people as she wants. That is tax-free to her and tax-free to the recipient.
But something tells me you should check and find out about that “asset test” — because you might need the money to actually pay for a caregiver down the road. Do that before distributing the money!
