[VA] [VA] Do I have to pay tax on a gift of property?
I am a disabled veteran living with my girlfriend in Chesapeake, Virginia. If we file a quitclaim deed, will it qualify as a gift for taxes? Or is it tax-exempt? I am trying to get on the deed to get an exemption on the city's property tax.
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When you receive an interest in property as a gift, meaning no money changes hands, the transaction is treated as a gift for federal tax purposes. Here are some other things to keep in mind:
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The gift tax rules apply to the person giving the gift, not the recipient.
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If the fair market value of the interest transferred is below the annual exclusion amount, your girlfriend wouldn’t need to file a gift tax return, and no tax would be due.
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Even if the value exceeds the annual exclusion, it’s her responsibility to file a return, but she wouldn’t actually owe tax unless she exceeds her lifetime exemption amount.
Under current federal law, the lifetime gift tax exemption is $13.99 million per individual. This means your girlfriend can give away up to that amount over her lifetime (in addition to the annual gift exclusions) before any gift tax would become due. Any gifts made under that threshold, when combined with the annual exclusions, wouldn’t trigger gift tax.
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I am a disabled veteran living with my girlfriend in Chesapeake, Virginia. If we file a quitclaim deed, will it qualify as a gift for taxes? Or is it tax-exempt? I am trying to get on the deed to get an exemption on the city's property tax.
Lexi, Chatbot
Have you consulted with a tax professional or real estate attorney regarding the potential tax implications of filing a quitclaim deed as a gift?
No.
Lexi, Chatbot
Are you looking to add your name to the deed solely for the purpose of obtaining a property tax exemption in Chesapeake, Virginia?
Yes.
Lexi, Chatbot
Is there anything else the lawyer should know before I connect you?
No.
Richard
Hello. My name is Richard, and I have been a licensed attorney for over 25 years. How are you today?
I'm good, how are you?
Richard
Good, thank you. I will need a minute or two to type out your response.
OK.
Richard
When your girlfriend transfers an interest in the property to you via a quitclaim deed without receiving anything in return, it’s generally considered a gift for federal tax purposes. Because no payment is made, the transfer qualifies as a gift.
For federal gift tax purposes:
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If the value of the interest transferred is below the annual exclusion amount, there typically wouldn’t be a tax due or even a need to file a gift tax return.
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Separately, for property tax purposes in Chesapeake, Virginia, you must be listed as an owner to qualify for the disabled veteran property tax exemption (Virginia Code § 58.1-3219.5). So, if your name is added to the deed, that requirement would be met.
OK, thank you. I just wanted to make sure I wouldn't owe federal taxes on the gift if we put that I paid $0 for it.
Richard
When you receive an interest in property as a gift, meaning no money changes hands, the transaction is treated as a gift for federal tax purposes. Here are some other things to keep in mind:
-
The gift tax rules apply to the person giving the gift, not the recipient.
-
If the fair market value of the interest transferred is below the annual exclusion amount, your girlfriend wouldn’t need to file a gift tax return, and no tax would be due.
-
Even if the value exceeds the annual exclusion, it’s her responsibility to file a return, but she wouldn’t actually owe tax unless she exceeds her lifetime exemption amount.
Under current federal law, the lifetime gift tax exemption is $13.99 million per individual. This means your girlfriend can give away up to that amount over her lifetime (in addition to the annual gift exclusions) before any gift tax would become due. Any gifts made under that threshold, when combined with the annual exclusions, wouldn’t trigger gift tax.
Oh, yeah, there is no way we would reach that. Thank you for everything.
Richard
No problem. If you have any follow-up questions, feel free to ask. Thanks for using AskaLawyer!
Richard
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