Giving back a property to the original owner?

[Marflore]

I have bought a house 15 years ago. About 5 years ago, I quitclaim deed it to a friend and he included it in his tax return ever since. There is no mortgage and it has been a rental property for the last 15 years. I didn't file gift tax return because it was a temporary transfer. He is about to quitclaim deed it back to me. Is this considered as sale?? Or gift to me? Or simply going back to original ownership? How should he and I treat it from tax perspectives? 

[M-MTax · Accepted solution]

The folks at the IRS are going to look at these two deals as completed gifts....one from you to the friend and then back to you from your friend. Probably file gift tax returns.

[Marflore]

That means, I should file a gift tax return in 2015 form? Also, he and I have to file a gift tax return again in 2020?

This is not exceeding the life time gift limit. I assume we don't owe any taxes, correct?

[M-MTax · Accepted solution]

Right and you don't owe any taxes until you get over 11.58 million