Hey, it's tax quips time from Tax Mama. Calm today, Tax Mama hears from Barb in the tax script, with a simple question. She says, "The farmer is selling his farm and everything on it to his son for one dollar. The basis of the land and machinery is approximately a hundred thousand dollars, and the fair market value is approximately five hundred and ten thousand dollars. How do I file Form 4797?" Well, Barb, that's a good question, but you're looking at this from the wrong direction. This isn't a sale; it's a gift. And if that's what they want to do, fine. File a gift tax return for everything over thirteen thousand dollars. Or, if Mom is still with Dad, over twenty-six thousand dollars. Or, if the son is married, Mom and Dad can gift the son and his wife fifty-two thousand dollars. Let's face it, with a five-million-dollar lifetime gift exclusion for each Mom and Dad, there's lots of room to do some gifting. Besides, nothing they do, sort of a legitimate fair market value sale, will change the basis anyway. And remember, you can find answers to all kinds of questions about selling to related parties and other tax issues free, where? Where else? At Tax Mama. Calm.
Award-winning PDF software
Video instructions and help with filling out and completing Where Form 4797 Livestock
