[BeKind437]

Hello. My parents plan on gifting and instead of $ would like to gift the max amount in property, 24K worth or 12K from each parent. We assume that the 24K max applies to gifting property as well as gifting $. Now the property they plan on gifting is not in their name. My mother is among many in a partnership, an LLC. My brother is the president of the LLC and will most likely not change the paperwork. How can we go about this? They would gift a % of their share in '09 and '10.

[Alder]

Yes, the annual gift exclusion applies to property, too. Which of course raises the issue of what the property is worth. May need an appraisal. From an estate tax standpoint, the present market may be a good thing, allowing transfers of more property tax free because its market value has gone down. If the property is in the LLC, they will have to either gift fractional membership interests in the LLC or somehow get the property transferred out of the LLC into their own names, so they can then gift fractional tenant-in-common interests in the property.

This is just general chat-in-the-brewpub information, of course, not legal advice specific to your family's situation. If your parents have sufficient assets to even have to be worrying about estate taxes, they can afford a good estate planning attorney and accountant to help them figure out the details. This family LLC stuff gets quite tricky, with the capital accounts and non-controlling interest discounts and all. As they say on Mythbusters, don't try this at home. Get a good E.P. lawyer.

[BeKind437]

Thank you for your reply. They are not gifting because of estate taxes, no need, unless things change under the new administration. It is only to even things, my brother was gifted $ in the past. My parents agreed to gifting property instead of $ to provide me with income. My parents can not transfer out of LLC. The LLC was formed last year when they purchased their first apartment complex. It has increased in value. My brother will not amend to provide me with a fraction of my mother's interest. This past year the building returned 40% from rental income and insurance. My mother will pass on my % of the return after she pays taxes; she will gift my return. We could continue this year to year however, we need something on paper in case something happens to my parents so I don't lose the principal. Also, if the % was in my name, I would pay less taxes on yearly return then my parents, I have no taxable income, they have a lot.

[John WA]

[QUOTE} How can we go about this? They would gift a % of their share in '09 and '10.[/QUOTE]

Your lawyer would draft a document that I'd call "Agreement to Transfer Units of ABC LLC", stating that your parents, as current registered owners of those units, are agreeing to transfer and convey those units to you.

They'd then sign and date and then tell the LLC's Manager about, in writing, so LLC will have been formally advised of same.