USA Selling property tax question

[jiji2006]

I have a tax question on real estate. I have taken depreciation on my house for the past years (like ~17 or so) and have decided to sell it to my son last year. If it was sold at a $1 to him. What are the tax implications? Do I have to pay like ~$200k to the government because I took the depreciation benefit over the years? The house is only worth $500k in its value. I don't even have that money to give to the government since I only sold it at $1. The house is in USA.

If I plan to live with him at the house for my entire life. Can I do something like living estate? Does this help with taxes in any way?

 

[kirby]

Selling the $500k value house for $1 is going to trigger a couple things. One is you will be subject to the gift tax regulations for the $500k gift. Second is that IRS will replace the $1 proceeds from sale with the $500k fair value of the house. And yeah the tax basis of the house has been lowered by the depreciation you took. So those two items together will create a large amount of taxable income. You really need to consult with a tax pro on your options before actually doing anything like this. Doing things in the way you suggested sounds slick but results in the worst case for you.