Question

Gift a House

Forum|Forum|4 years ago
April 11, 2022
2 replies
0 views

I am filling out a Form 709 for gifting a house. What does the IRS require to prove the value at the time of the gifting (Quit Claim Deed)?

A

Anonymous_

Employee

An appraisal from a certified appraiser is the only indicia of fair market value that the IRS must accept.

J

jumicircle

The reason IRS wants a valuation is because there is a gift limitation without tax. That amount for 2022 is a mere

$16,000. Anything above that is subject to tax. If you were to give it to the person as a part of your estate (when you die) the limit of no tax is 12 million dollars.

What you might consider is gifting the person in stages so that no tax is required. For example... Let's say the house is worth $160,000 you could gift $16,000 this year and then the same amount for another 9 years (it won't really be that long because the exempt amount goes up nearly every year).

And you will not have to complete the form 709!!!

With all that said.... If you don't care about the tax paid and it isn't a burden on either you or the recipient, then just go ahead and gift it...

A

Anonymous_

Employee

@jumicircle wrote:
What you might consider is gifting the person in stages so that no tax is required. For example... Let's say the house is worth $160,000 you could gift $16,000 this year and then the same amount for another 9 years (it won't really be that long because the exempt amount goes up nearly every year).

No, the annual exclusion does not go up every year. It was $15,000 for four years and then $14,000 for the four years prior to that.

Regardless, I cannot think of anything more ridiculous than gifting one-tenth of a house each year for ten years. It is simply absurd and an appraisal is still needed for the total fair market value at the time of each gift.

S

sandy4042

Employee

@Anonymous_ Yes, I think the OP already has thought through gifting the house pros/cons if they're already at the point of filing the 709 (i.e., they've already gifted it). The advantage of the quit claim deed to a family member is the property tax remains the same for the family member/new owner.