[Chespejel]

My mom who is a US citizen just sold a house in Mexico, she wants to gift me the money, for me to buy a house. Is that money taxable for me or her?
(The amount is around 100,000)

[AtlantaTaxExpert]

If you mother's house in Mexico was her primary home for two of the last five years, then the sale is NOT taxable, and does not even have to be reported.

If it was NOT her primary home, then she must report the PROFIT from the sale as a long-term capital gain, and be taxed at a rate from 5 to 15%.

Now, if she gives YOU the money, that is a gift, and a gift tax return is required. By accessing the unified Credit, she will pay NO gift tax, but the gift tax return will still be required.

[Chespejel]

Thanks for your answer! However I have a few questions more:


What is Unified Credit?

My mom does not have to pay taxes because it was her primary home, but do I have to pay taxes if my mom gives the gift to me?

When do I have to file the gift tax return? As soon as I get the money?

Thanks!

[Chespejel]

Could you also explain why the will pay NO gift tax, even when the gift tax return is required?
I talked to the IRS over the phone and they only say that she can give me up to 13,000 if not it will be taxable.

[AtlantaTaxExpert]

Her gift tax return for 2012 can be filedd between 1 Jan to 15 Apr 13.

The Unified Credit is the credit on your estate and gift tax that alliws you to file such returns WITHOUT paying any tax. It changes every year, but it effectively makes the first $5 million of the combined estate/gift tax free.