home gifted to child

[Possi]

Hey, my client handed over a house to his child. It was a second home to my client. His daughter had been living there for free, and he eventually gave it to her. 

The closing papers are a "deed of bargain and sale" for $10.00.

There is a "consideration" of $330k and an assessed value of $292k. 

What, if anything, must I do with this? Must a gift tax return be filed? 

And, what if he never gave me those papers? 

[Abby Normal]

It's hard to feel bad for a child who is given a house, but they will have a heck of time coming up with dad's basis when they sell the house.

It's best to file the gift tax return because we don't know what the estate tax laws will be when he dies, but gift tax returns can be done after he dies, if needed and there's no penalty.

Papers? What papers? I don't recall any papers.

 

[grandmabee]

Gift of over 15,000.  gift tax return needs to be filed.  Her basis is fathers basis plus any gift tax paid.

Now is the time to hunt down the fathers basis.

 

[Sara EA]

A gift tax return must be filed.  I don't know what state the clients are in, but some state tax departments are meticulous about checking public real estate transaction records for such things.  They don't want to let people get away with gifting their homes and then qualifying for Title 19 when they need nursing home care.

[Possi]

Good points! Thanks, y'all!