14 Jun What taxes are owed if I gift a house to my adult children?

Q. I have a clear title house with property in South Carolina and would like to gift it to my two adult children. One is married, the other is not. Would there be any special tax charged to them other than property tax, and are there any other things I should know about the property being put jointly in their names? We all live in New Jersey. Would it matter if any of us lived in South Carolina before this happened?
— Homeowner

A. We’re glad you’re planning ahead.

And you’re correct to realize that every state could have different fees for property transfers.

Depending on the detail of the transaction, there may be a South Carolina realty transfer fee.

But there would be no other income taxes, said Steven Holt, partner and chair of the tax law, trusts and estates practices with Mandelbaum Barrett PC in Roseland.

The transfer, though, is considered a gift for federal gift tax purposes, Holt said.

“However, each spouse is entitled to make lifetime cumulative gifts of up to $13.61 million under his or her federal gift tax exclusion, without the incurrence of a gift tax,” he said.

You would have to file a gift tax return for the sole purpose of reporting the use of a portion of the donor’s gifting exclusion, he said.

“Neither New Jersey nor South Carolina imposes a gift tax or an estate tax,” he said. “The state of residence of the donor and donee does not change these results.”

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This story was originally published in June 2024.

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