Do I have to pay taxes on the property that is transferred to me?

Question

If my brother transfers his property to me do I have to pay taxes? (Like some kind of gift tax)

Note1: He got a loan from a bank for $130K and paid $70K down payment on the house

Note2: It’s been about 3 month since he built this house.

Answer 1

You are allowed to receive $12000 per year from him without paying a tax on it. Any amounts over this are subject to the gift tax. The tax would apply to the fair market value of the property when it was given to you minus the $12000.

Answer 2

You really need to consult a tax professional before entering into a sale between related parties at less than fair market value.

Answer 3

As jem mentioned, your brother can give $12K per year in gifts.  But she didn't mention that if he gives more than that, like the house, he just has to file a gift tax.  But there is a lifetime exclusion that is currently a million dollars before he would have to pay taxes.  In other words, a person can give $12K per year plus a million per lifetime before being taxed on gifts.

The tax burden would be on him once he reaches a million bucks for his life.  Also the burden of filing the gift tax returns (even this one where no tax would be due) is his.  The recipient of the gift never has to pay a gift tax or an income tax for what he receives.