gift tax
December 21, 2021 | 35,00 EUR | answered by Steuerberater Knut Christiansen
My nephew is helping me to obtain a real estate loan by co-signing the contract. I want to make him a 33.33% co-owner of the house to be acquired. I will cover the renovation of the house with my own funds; my nephew does not have to contribute any money for either the purchase or renovation. The house will be occupied by me and my nephew will not receive any income from the house. How will his gift tax be calculated? Will the purchase price of the house be used as the basis, or the end value after renovations? Can he offset the "guarantee" as consideration?
Hello and thank you for using ask-a.com!
Regarding your question, I would like to provide the following feedback.
As a gift, 33.33% of the acquisition costs plus the renovation costs should be considered. Because your nephew does not bear any costs himself and is therefore enriched to this extent by your financial contribution. The guarantee itself cannot be deducted as a consideration, as it is only a contingent liability. Only when he is claimed on the guarantee or participates in the repayment of the loan, is there consideration or a contribution of his own.
I hope this answers your question, otherwise feel free to ask a follow-up question free of charge.
I would like to point out that this forum cannot replace comprehensive and personal tax advice, but is primarily intended to provide an initial tax assessment. By adding or omitting relevant information, the legal assessment of your matter could turn out differently.
Best regards!
Knut Christiansen
Tax consultant
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