Gifting Corporation owned Real Estate to a Relative/ Non-Relative

Question

403 viewsNovember 15, 2023Real Estate Tax

0

Paul Tan (anonymous) Posted November 15, 2023 MadanCA Team edited answer November 15, 2023

Hello,

I am a sole owner/ director of my corporation A. My corporation A own a house 100%.
If my corporation A gifted this house without any charge whatsoever to my sister who has nothing to do with my corporation, what would be the tax consequences for my corporation A and for my sister?

If my corporation A gifted this house without any charge whatsoever to a non-relative who has nothing to do with my corporation, what would be the tax consequences for my corporation A and for the non-relative?

Thanks!

1 Answer

score 0 · Answer 1 · 2023-11-15T15:32:18+00:00

Hi Paul,

When a taxpayer makes a gift of property / shares, the taxpayer is deemed to have ‘sold’ the property / shares for their fair market value at that time. This can trigger a capital gain. It does not matter if the recipient of the property / shares is a relative or a third party. Furthermore, the cost basis of the property / shares for the recipient is equal to the FMV of the property / shares on the date of the gift. The corporation does not record a gain or loss in this circumstance.

Gifting Corporation owned Real Estate to a Relative/ Non-Relative

1 Answer

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