Regarding Gift Tax Form 709 (not supported by TurboTax software), we gifted our son residential Rental Real Estate. We, the Donors, are assessed gift tax on Fair Market Value but have heard that our son must carry our Depreciated Basis as his Basis, not the Fair Market Value.
Our Depreciated Basis is approximately one third of current Fair Market Value. Since we were taxed at Fair Market Value, can his Basis be Fair Market Value also?
@palbert1 wrote:Our Depreciated Basis is approximately one third of current Fair Market Value. Since we were taxed at Fair Market Value, can his Basis be Fair Market Value also?
No, your son has a carryover basis (i.e, your son takes your adjusted basis).
Further, you will not be taxed on the FMV unless you exceed your lifetime exemption ($12.06 million per individual in 2022).
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