My parents just deeded their home to me for $1.00. Do I still qualify to be gifted the 2008 $12,000.00 amount without being gift taxed?
The gift tax rules are very much misunderstood by many people. You, as the person who receives a gift, aren't required to pay a gift tax. The gift tax is always assessed to the giver.
When your parents transferred their home to you for a dollar, they made a gift to you of the value of the property -- which is obviously greater than the single dollar sales figure. For instance, if the home was worth $300,000 and it was sold to you for a dollar, they made a gift to you of $299,999. However, this doesn't automatically mean that they will owe a gift tax on the transfer.
Everyone has the right to make unlimited gifts during a calendar year in the amount of $12,000 per person to as many people as they wish without having to either pay a gift tax or even file a federal gift tax return. However, over and above this amount, everyone also has a lifetime one million dollar lifetime exemption from gift taxes. Therefore, your parents could transfer the home to you for a dollar and use their lifetime gift tax exemptions that they both have to avoid having to pay any gift tax. They would, however, be required to file a federal gift tax return that would indicate their use of a portion of their lifetime exemptions to cover the gift tax that would otherwise be due.
