TAX IMPLICATION ON SELLING PROPERTY RECEIVED BY GIFT FROM FAMILY MEMBER

This discussion clarifies the capital gains tax implications when a property, initially received as a gift from a family member, is later sold. The key question is who is liable for the capital gains tax – the original gifter, the son who received the gift, or his wife who received a share. Experts confirm that while gifts between specified relatives are tax-free, subsequent transfers, like a son gifting a share to his wife, can trigger capital gains tax. The tax liability for the sale of the property will generally fall on the son, even if the legal ownership is shared with his wife, due to specific tax rules regarding spousal transfers.