Home deed transfer to family - how to report

[aballafun1]

Hello. A parent placed me on the title of their home when they purchased. There was no money used or exchanged. Two years later, the parent has asked me to remove myself from the title for eligibility on property tax exemptions. Again, no money is being exchanged. However, the attorney is filing this as a gift deed. Do I need to report, how and to what outcome? Thank you. 

[Hi Palms]

No such thing as a "gift deed" so it's probably just a quitclaim deed with zero consideration for the transfer. You could treat this as a nonevent especially if your parent didn't file a gift tax return when your name was placed on the deed at the time of purchase. Otherwise, you could file a gift tax return, form 709, to show the FMV of the "gift" back to your parent.

[Opus 17]

I suppose that technically, your parent gave you 1/2 (or 1/3) of the home, that would require the parent to file a gift tax return if the value was more than $15,000 at the time.  And technically, you are now giving that 1/3 or 1/2 back to the parent, so you need to file a gift tax return.  Gift tax returns are not supported by Turbotax, you have to do it yourself or see a pro and file it separately from your normal tax return.  But gift tax is not actually owed unless your lifetime total of gifts is more than about $14 million. 

I wonder if there is a case to be made to just ignore the whole thing.  @rjs  @AmeliesUncle ??

In any case, if your parents did this thinking about estate planning and probate, you should all go and see a real estate planner instead of trying to do it yourself.  There are a lot of advantages to seeing a pro and doing it right.  

[Hi Palms]

I wonder if there is a case to be made to just ignore the whole thing.

Yes, there certainly is a case to be made. I have seen the same situation in my practice and have advised clients to do precisely that as have other legal professionals.

Are the people you're asking lawyers?

[Opus 17]

---

@Hi Palms wrote:

Are the people you're asking lawyers?

---

I have no idea.  Anyone can claim to be anything on the internet.  They are forum regulars who usually respond to requests for backup comments, and who sometimes have opinions different from mine, which is often useful (no point in only asking yes-men or yes-persons). 

The taxpayer should always consult with their own professional if they want a personal, professional response that someone will stand behind.