Is it necessary to submit a 3-NDFL declaration when donating an apartment to a close relative?

The donor never pays tax

There are situations when the tax authority sends a letter to the donor, demanding that he declare income and pay tax. When receiving such a letter, there is no need to worry - the tax authority sometimes receives only data on the alienation of property, assuming that a sale has been made and you have received income. You can ignore the letter from the tax service or write an explanatory note and attach a copy of the gift agreement to it.

In the future in this article we will only consider situations where you received property or money as a gift.

Deductions to reduce personal income tax when selling an apartment before 2019

You submit a 3-NDFL declaration if you sell an apartment before the minimum tenure period expires. The amount of tax depends on the size of the deduction. It happens that you do not pay tax, but submit a “zero” return to the tax office.

There are several types of deductions to reduce personal income tax when selling an apartment:

1. With confirmation of actual purchase costs. But when you receive an apartment as a gift or inheritance, your expenses for this property are zero. Therefore, this type of deduction could not be used before the sale of the apartment in 2021.

2. Without proof of expenses. This type of deduction applies specifically to those who received an apartment as a gift or inheritance, since there are no expenses. You will receive a deduction of 1 million rubles; this type of deduction can be used once a year for 1 property. On January 1, 2016, the law No. 325-FZ of September 29, 2019 came into force, thanks to which you will not reduce your tax if you underestimate the cost of selling an apartment. Now, when selling, look at the cadastral value of the property as of January 1 of the year you are selling the property. If the income from the sale is lower than 70% of the cadastral value, then tax is paid on the larger amount.

Example: In 2021, you sold a donated apartment for 2.5 million rubles. As of January 1, 2021, the cadastral value of the apartment is 4 million rubles. The cadastral value (4 million rubles x 0.7 = 2.8 million rubles) is higher than the income from the sale (2.5 million rubles), which means that for tax purposes the cadastral value is taken into account. Since there were no purchase expenses, you applied a deduction - 1 million rubles, and paid 13% tax on 1.8 million rubles (2.8 million rubles - 1 million rubles) - 234,000 rubles.

3. If there are several shares in a donated or inherited apartment. It will be more profitable if the owners sell their shares as independent objects of sale and purchase. In this case, a property tax deduction is provided to each taxpayer in an amount not exceeding 1 million rubles.

Example: Two brothers owned an apartment for less than three years. The property was in their common shared ownership of 1/2 each. The apartment was sold under two separate sales and purchase agreements and registered as the sale of two independent objects. Each share was sold for 1.5 million rubles (a total of 3 million rubles per apartment).

Let's calculate the tax amount for each owner: 13% x (1,500,000 (income amount) - 1,000,000 (deduction amount)) = 65,000 rubles. Thus, each owner upon sale of his share will receive a maximum tax deduction of 1 million rubles. If they sold the apartment under one agreement, then the tax would be: 13% x (1,500,000 (income amount) - 500,000 (deduction amount)) = 130,000 rubles, since the tax deduction of 1 million rubles will be distributed in the amount of ½ to each.

When do you not need to pay tax on a gift?

According to tax law, tax is NOT paid when receiving a gift in the following cases:

1) If you received money or property from another person as a gift that is not related to real estate, transport, shares/shares/shares (paragraph 1, clause 18.1, article 217 of the Tax Code of the Russian Federation).

Example: For his birthday, guests gave Semenov I.P. 60 thousand rubles. Since a gift in the form of money from other persons is not taxable, Semenov I.P. you do not need to declare this income or pay tax on it.

2) If you received property as a gift from a family member or close relative (paragraph 2, clause 18.1, article 217 of the Tax Code of the Russian Federation, Letter of the Ministry of Finance of Russia dated June 1, 2016 No. 03-04-05/31613).

In accordance with tax legislation (paragraph 2, clause 18.1, article 217 of the Tax Code of the Russian Federation), such relatives are recognized as: spouses, parents and children (including adoptive parents and adopted children), grandparents and grandchildren, full and half-blooded (having a common father or mother) brothers and sisters. Any property, including real estate, received as a gift from these persons is not subject to tax.

Example: Osina M.Z. received as a gift from grandfather Osin P.L. automobile. Since, according to clause 18.1 of Art. 217 of the Tax Code of the Russian Federation, the grandfather and granddaughter are close relatives, then Osina M.Z. you do not need to declare the receipt of a car as a gift and pay income tax.

Example: Stolbova I.B. received under a gift agreement from her mother Terekhina M.S. apartment. Since parents and children are close relatives, Stolbova I.B. there is no need to file a 3-NDFL tax return and pay tax on income from the gift.

When receiving real estate, vehicles, shares, shares as a gift from a relative or family member not included in the above list, you will have to declare income and pay income tax.

Example: Berestov G.P. I received an apartment as a gift from my aunt. Since aunt, according to clause 18.1 of Art. 217 of the Tax Code of the Russian Federation does not apply to close relatives, then Berestov G.P. must submit a 3-NDFL declaration to the tax office and pay a tax of 13% of the cost of the apartment.

You can read more detailed information about taxation when donating property between relatives in our article: Tax when donating property between relatives.

Lawyer's answers to frequently asked questions

Is it possible to submit 3-NDFL through another person if it is not possible to do it yourself or via the Internet?

Yes. You need to draw up a power of attorney, it is provided along with the declaration. Information about it is indicated in the document itself.

Who files a declaration and pays tax when making a gift from a legal entity to an employee?

Employer. Gifts with a total value of up to 4,000 rubles. per year are not subject to tax.

Is there a tax deduction for gifts?

No, the donor does not receive income or pay taxes, and the recipient does not spend the money.

I was given a share in the apartment, the contract was certified by a notary. Will the Federal Tax Service find out about the transaction if I do not file a declaration?

Yes, he will. Information to the Federal Tax Service on all certified transactions with citizens' property is transmitted by notaries.

How to determine the market value of a car for tax purposes?

You need to indicate it in the deed of gift, based on the average prices for a car in the region, or order an independent assessment.

When do you need to pay gift tax?

In general, gifts are recognized as income in kind and if the income is not clearly exempt from taxation (we described these cases above), then you must declare it and pay tax (Clause 1, Article 210 of the Tax Code of the Russian Federation, Article 41 of the Tax Code of the Russian Federation).

If a person who is not on the list of close relatives has given you real estate, transport, shares or a share in an organization, then you are required to submit a declaration to the tax authority in Form 3-NDFL and pay a tax in the amount of 13% of the value of the gift (clause 1 of Art. 210 of the Tax Code of the Russian Federation, Letter of the Ministry of Finance of Russia dated 05.08.2014 No. 03-04-05/38547).

Example: In 2021, a friend gave Bochkova T.M. a car worth 300 thousand rubles. Since gifts from friends are not exempt from tax, Bochkova T.M. by April 30, 2021, must submit a 3-NDFL declaration to the tax office and, by July 15, 2021, pay a tax in the amount of 13% of the value of the gift (300,000 x 13% = 39 thousand rubles).

Example: In 2021, a nephew gave Slavin D.B. an apartment worth 2 million rubles. According to clause 18.1 of Art. 217 of the Tax Code of the Russian Federation, the nephew is not a close relative, therefore Slavin D.B. by April 30, 2021, must submit a 3-NDFL declaration to the tax office and, by July 15, 2021, pay a tax in the amount of 13% of the value of the gift (2,000,000 x 13% = 260 thousand rubles).

Also, a 13% tax must be withheld from a gift if it is received from an organization (the gift can be in any form, even monetary), and its value exceeds 4,000 rubles. We will not dwell on this in detail, since in most cases the organization itself withholds tax on the gift and reports to the tax authority. That is, you do not have the obligation to pay tax and file a declaration.

Income received from foreign sources

A separate list of income codes has been approved for those received from foreign sources. All of them are listed in Appendix No. 4 to the Filling Out Procedure. The list includes codes from “21” to “32”. They must be used when filling out Appendix 2 of the 3-NDFL declaration.

When filling out the 3-NDFL declaration in 2021, the taxpayer determines the type of income code independently, taking into account the information available in the documents on the basis of which data is entered into the reporting. If any types are identified incorrectly, tax authorities will most likely ask for clarification.

types of income received from sources in the Russian Federation

types of income received from sources outside the Russian Federation

Deadlines for filing a tax return and paying taxes

The 3-NDFL declaration must be submitted to the tax office at the place of primary registration (registration) no later than April 30 of the year following the year the gift (income) was received (clause 3 of Article 228, clause 1 of Article 229 of the Tax Code of the Russian Federation).

If, as a result of the declaration, you must pay tax, then this must be done no later than July 15 of the year following the year in which the gift (income) was received .

Example: In 2021 Sychev I.A. I received a room as a gift from my niece. Since the niece, according to clause 18.1 of Art. 217 of the Tax Code of the Russian Federation, is not a close relative, then Sychev I.A. filed a 3-NDFL declaration with the tax authority by April 30, 2021 and paid income tax in the amount of 13% of the cost of the room by July 15, 2021.

You can learn about the liability and penalties for failure to submit or untimely submission of the 3-NDFL declaration, as well as non-payment of tax, in our article: Penalties for delay/failure to submit the 3-NDFL declaration or non-payment of tax.

Conceptual apparatus

What is and why do you need form 3 personal income tax when donating an apartment? As you remember, donation is a transaction that falls within the competence of civil transactions.

One way or another, this procedure is taxable, unless it has some nuances. What does a donation consist of and why is tax required?

Donation is a transaction that is regulated by the civil code.

In addition, this is an action that implies the transfer of property from one legal possession to the ownership of another person.

The transaction is two-sided and the donor, the person who alienates the property and the donee, who accepts the property, participate in it on completely equal rights.

The deal has a number of other features. For example, it is absolutely free. This means that the donor, without any mercantile interest, transfers the property into someone else’s ownership, without claiming any reward.

This is what makes the deal remarkable. You can learn more about all the nuances of the transaction in Chapter 32 of the Civil Code.

But we are still interested in the question related to Form 3 of personal income tax. What kind of paper is this, how is it filled out, and most importantly, is it really necessary?

Form 3 of personal income tax itself is a kind of tax return, typical for submitting information when carrying out transactions.

This document is recognized as special and is submitted to the tax office directly at the place of registration of the citizen in order to notify the state of his income or, conversely, expenses.

Entrepreneurs, lawyers, notaries and other persons who are not officials, that is, do not work for government agencies, are required to submit such documents.

It is also customary to submit a document using this form when it comes to a sale or purchase transaction or a gift.

We suggest you read: If your ex-husband does not pay child support, what to do and where to go to force your father to pay

Refusal to submit this document to the tax authority is equivalent to an administrative violation and can cause many problems.

Read on our website about whether it is possible to sell, transfer or return a donated apartment, as well as how the donor can revoke the deed of gift in a timely manner.

How to determine the value of a gift and the amount of tax?

If the value of the gift is determined in the contract, it is used as the amount of income.

Example: In 2021 Dmitrov F.M. I received an apartment from my uncle under a gift agreement. At the same time, the gift agreement indicates the price of the apartment in the amount of 1.5 million rubles. At the end of 2021 (until April 30, 2021) Dmitrov F.M. must submit a 3-NDFL declaration to the tax authority, which will indicate income from the gift in the amount of 1.5 million rubles. Also, until July 15, 2021, Dmitrov will have to pay income tax in the amount of: 1,500,000 x 13% = 195,000 rubles.

If the value in the contract is too low, tax inspectors will be able to demand payment of personal income tax based on the market value of the property. This position is supported by letters from the Russian Ministry of Finance, which indicate that in relation to the gift of real estate between persons who are not close relatives, for tax purposes, the amount of income can be taken from the agreement only if it corresponds to the market value of the real estate (Letters of the Russian Ministry of Finance dated October 15, 2015 No. 03-04-05/59154, dated 05/08/2014 No. 03-04-05/21903, dated 04/30/2014 No. 03-04-05/20685).

Example: An uncle gave his nephew S.M. Kislov a gift. an apartment in the center of Moscow, indicating the cost of the apartment in the donation agreement is 100 thousand rubles. If Kislov S.M. submits a declaration indicating an income of 100 thousand rubles, then the tax inspectorate will most likely challenge the amount of income and ask to pay a tax of 13% of the market value of the apartment.

If the gift agreement does not indicate the value of the gift, the amount of income is determined by the market value of the gift received.

When determining the cost of housing, the tax office often requires that it be based on the cadastral value. Since the tax legislation does not define the procedure for determining the market value, and you, for example, do not agree with the cadastral value, you can declare a different amount for calculation, insisting that it is the market value of your home. However, in this case, be prepared to defend your position before the tax authorities.

You can find out the cadastral value of housing in the cadastral passport of the property, as well as by contacting Rosreestr or the Federal Service of Cadastre and Cartography (Cadastral Chamber).

Example: In 2021 Golubeva D.K. I received a room from my mother-in-law under a gift agreement. Since the mother-in-law, according to the Tax Code of the Russian Federation, is not a close relative, Golubeva D.K. must pay income tax in the amount of 13% of the cost of the room. By contacting Rosreestr Golubeva D.K. I found out the cadastral value of the room (350 thousand rubles). At the end of 2021 (until April 30, 2021) Golubeva D.K. must submit a declaration to the tax authority indicating her income from the gift of 350 thousand rubles. Pay income tax in the amount of 45,500 rubles. (RUB 350,000 x 13%) she will have until July 15, 2021.

Methods for filling out the form

How to fill out 3 personal income taxes when donating real estate? In order for the filling out to be competent and correct, it was accepted the first time and you do not spend a long time carrying your papers back and forth, we will give a number of practical tips that will certainly help with your problem.

So, first of all, if you have never seen what a tax return looks like, you don’t know exactly how to fill it out, and in general you doubt that you understand anything in this matter, then it is better not to tempt fate.

Contact a specialized office , which is obliged to help you fill out such an important document, based on the situation.

Of course, you should remember that this assistance is provided on a paid basis, but it helps to significantly save time that would have been spent delving into the issues of drawing up the form.

If you still feel that the task yourself

1. You will need a number of documents to fill out. These include a passport, deed of gift, documentation from the tax code, access to the Internet.
2. If you are the person to whom the apartment was given as a gift, you can fill it out only after the transaction has been registered and after you have received the ownership documents. Previously, this action of filling out the form could not be carried out.
3. from the official website of the tax service or search on the Internet. You are encouraged to fill out the form by computer rather than by hand.

When filling out, follow these steps :

• enter the number of the inspection you contacted;
• indicate in the taxpayer characteristics section the option other person;
• in the available income tab, select the income of an individual taken into account as a result of concluding contracts of a civil nature or nature;
• indicate the source of payments received by selecting from the list listed.

Once completed, the document is printed in several copies, with your initials, date of completion and signature.

You can find out whether there is a difference in the cost of registering a deed of gift for an apartment owned for less than three years in our article.

How to prepare and submit a 3-NDFL tax return?

You can fill out the 3-NDFL declaration using the declaration form (see Forms and Forms). You can download samples of filling out the declaration here: Samples of filling out 3-NDFL when donating.

After completion, you must submit the 3-NDFL declaration to the tax authority at the place of your permanent registration. You can do this in person at the tax authority or send the declaration by mail with a valuable letter with a list of the attachments (more detailed information is provided in our article: How and where to submit a 3-NDFL declaration?).

Instructions for preparing a declaration under an apartment donation agreement

Filling out and submitting 3 personal income tax should be done in several stages:

• The first step should be to collect the necessary documents. The taxpayer will need a passport, a certificate of ownership of the apartment, a gift agreement, and documents confirming the relationship with the donor.
• The second step is to directly fill out the declaration. Here you must indicate the number of the inspection where the document will be submitted. This can be obtained directly from the regulatory authority. It should also indicate who submits the declaration - the taxpayer himself or an authorized representative. The recipient indicates civil contracts and transactions as the source of income. In conclusion, the source of personal income tax payment should be indicated. If the relationship is close, this fact should also be reflected in the appropriate section of the form.
• The third step is to provide a package of documents to the Federal Tax Service. This can also be done either by the taxpayer himself or by his authorized representative.

After this, all that remains is to wait for the test results. If the regulatory authority is satisfied with all the documents, there will be no messages. In the future, demands for payment of property taxes will only come. If errors are found during the verification process, a letter will be sent demanding that they be corrected and a correct declaration be provided.

Deductions to reduce personal income tax when selling an apartment after 2019

At the end of 2021, Federal Law No. 325-FZ of September 29, 2019 was adopted, which introduced changes to the Tax Code.

Article 220 of the Tax Code has been supplemented with the following provisions:

When selling property (except for securities) received free of charge or with partial payment, as well as under a gift agreement, the taxpayer has the right to reduce the income received from the sale of such property by the amount of documented expenses in the form of amounts from which the tax was calculated and paid upon acquisition (receipt) of such property.

If, when a taxpayer receives property by inheritance or gift, the tax in accordance with paragraphs 18 and 18.1 of Article 217 of this Code is not levied, when taxing income received from the sale of such property, the documented expenses of the testator (donor) for the acquisition of this property are also taken into account, if such expenses were not taken into account by the testator (donor) for tax purposes, except for the cases provided for in subparagraphs 3 and 4 of paragraph 1 of this article.

This means that in 2021 you can already file a tax return on income for 2021, taking into account these changes. Unfortunately, new deductions in the amount of expenses of the donor and testator cannot be applied to income received from the sale of property before 2019.

Now there are additional types of deductions to reduce personal income tax when selling an apartment:

1. If you are selling a gift that you did not receive from a close relative. If a person (friend, not a close relative) gives you an apartment or a car, you must pay a tax of 13% on the value of this gift. Now, if you decide to sell such a gift before the minimum holding period, you can reduce the tax base by the amount on which you paid 13% when donating.

Example: A friend gave you a house worth 2 million rubles. When donating, you paid 2,000,000 rubles * 13% = 260,000 rubles in tax. A year later you sold this house for 2,200,000 rubles. Now you need to pay tax on the sale. Until 2021, you could take advantage of the standard deduction of 1 million rubles and the tax would be: (2,200,000 - 1,000,000)*13% = 156,000 rubles. Now it is more profitable to use a deduction in the amount on which tax was paid upon gift. It turns out: (2,200,000 - 2,000,000) * 13% = 26,000 rubles.

Give the state 156 or 26 thousand as tax - the difference is noticeable and the choice is obvious. But the tax office is unlikely to tell you that in your case it is more profitable to do such and such. Therefore, monitor changes in legislation or contact specialists to know your rights.

2. If you are selling an inheritance for less than the minimum period of ownership

If you decide to sell the inherited property before the minimum period of ownership, you will be able to use a deduction in the amount of the value of this property if the decedent left you with documents about this value.

Example: If your dad left you an inheritance of an apartment that he bought for 1,500,000 rubles, and you have documents confirming this fact, you will be able to claim a deduction for the sale of this apartment of 1,500,000 rubles, and not just 1,000,000 rubles, as it was until 2021. You have decided to sell this apartment for 2,000,000 rubles.

Now taxes will be (2,000,000 −1,500,000)*13%=65,000 rubles

Until 2021, taxes would be: (2,000,000 −1,000,000)*13%=130,000 rubles

You can save thousands and hundreds of thousands if you take advantage of the tax code.

There is a nuance: if the testator or donor has already taken into account the expenses of the property, which was then given to you or left as an inheritance, for tax purposes, you will not be able to deduct their expenses. However, this does not apply to cases where the donor or testator received deductions for the purchase of residential property or the payment of interest on a residential mortgage.

If the testator or donor received a property deduction for the purchase or acquisition of a residential building (apartment, room, plot of land for individual housing construction) or a deduction for the repayment of interest on a mortgage, housing loans, loans spent on the purchase of this residential building (apartment, room, plot under individual housing construction), you can apply the expenses of the testator or donor to the deduction.