Basis of vacant lands gift for lifetime 709

[user17615314338]

Can upgrades and improvements on the gift of vacant lands be added to basis of cost of purchase?

[M-MTax]

The cost of improvements to land can certainly be added to the cost basis of the land, but what are you really asking and what is your position in this transaction?

Are you the donor of the land and/or the donor of the value of the improvements to the land? 

Are you the donee (recipient) of the gift of the land and/or the recipient of the gift of improvements to your land? 

Your question is somewhat vague.

[user17615314338]

First, Thank you for your help and guidance. I am the donor, my son is the donee.

we did a lot of improvements to the lands, and we pay HOA ( for main gate entrance ( building and maintenance/clear the roads to access the land/pay for a lawsuit to HOA/ grade the land when there were run off etc…)

I need to calculate the upgraded basis for my Lifetime 709 form, and also to give to my son, so he can file the long term capital gain ( the land we’re purchasing 21 years ago)

I appreciate you and this community for guidance and help!

[M-MTax]

If you're filing a 709, each year stands on its own in terms of the annual exclusion. 

If you gave your son the property in one tax year, then you would (or did) file a 709 or that year based on the FMV of the property as of the date of the transfer. If you then paid for improvements on the property in a later year, you would simply calculate the cost of those improvements and file a 709 based on that cost.