When it comes to gifting property to a relative, the government does not treat it as a gift but as a sale at fair market value. This can result in capital gains taxes if you are gifting property that is not covered by your principal residence exemption and the value has increased since you acquired it. However, if you have an appraisal at a lower value, this may reduce the amount of tax.

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Your taxes could also be reduced by selling the property to a child in exchange for a promissory note (a legal IOU). This may allow you to space your taxes over up to five years and possibly at a lower tax bracket.

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We can work with you and your accountants to come up with a plan than works for your family. Get in touch with Dan today.

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