My grandfather passed away and my dad is selling the house and said he would like to give me a chunk of money from the house profit. Is that considered a gift and will it be taxed at 35% or since it will be taxed in the sale of the house is it tax exempt when given to me? I was told to contact a probate lawyer for this question but I wasn't able to.
Answer
If the property was included in your grandfathers estate it is most likly to have a basis step up, and its sale should not produce income tax to you or your father, other than post death appreciation. If your father gifts a portion of the house ( or the sale proceeds ) to you, it would not be taxable income. You should get the relevant information to a probate attorney to look at the actual facts and the documentation to get a real opinion on your circumstances. Your father also needs to know exactly how title is held, and complete any steps to place the home in his name as saleable.
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