Is there a federal tax on the value of transferred property each time it is transferred?

Jan 21, 2019
askacpaicon

A family member signed over two properties that were held in a trust. Now he would like to get one of them back. As I understand, in California, each time a property is transferred the state will tax the value of the property. Is that also the case federally? Is there a way to transfer the property back without incurring additional taxes?

It sounds like this is a question about transfer tax. There is not a federal transfer tax, just state and local. But there could be federal and state income tax consequences to a transfer of a property due to the basis that the owner has in the property, including potential relief of debt issues. Further, when an asset with a value over $15,000 is transferred to another person, you are required to file a gift tax return for potential assessment of gift tax return or utilization of the lifetime gifting limits.

Due to the myriad of matters on such a transaction, I recommend you reach out to a CPA that has expertise in real estate matters.

For more resources, check out PICPA’s Money & Life Tips, Ask a CPA, or CPA Locator.

Answered by: Paul K. Rudoy, CPA, PFS, is managing partner of H2R CPA in Pittsburgh, Pa.

Pennsylvania CPA Journal

Read the latest from the Pennsylvania CPA Journal online or via the mobile app and digital edition.

Read More

CPA Now

Get the latest info on professional trends, management, and leadership skills on CPA Now.

Read More

PICPA 2019 Premier Sponsors

Platinum Sponsor

Gallagher Bollinger Logo CPACharge

Gold Sponsor

Paychex logo

Bronze Sponsor

payroc-logo-hi-res

Interested in becoming a sponsor? Contact Kelli Comegys for packages and opportunities.