@DaveF1006 Thanks for your input. Based on the fact that brother executed the quit claim deed to sister and her husband so that they could then get a loan against the property in order to pay brother for his half share, evidenced by the actual payment to brother upon receipt of the loan proceeds, that would probably be construed by the IRS as an expression of intent in the absence of a written agreement, thereby connecting the two events as on step transaction. I guess the real question is level of risk as to whether the IRS would ever connect the dots and know that sister paid brother 7 months after the quit claim deed was executed and that such payment was intended to be for his half of the property as opposed to out of sisterly love. Filing late Form 709 gift tax returns might call the IRS' attention to the matter???
Another twist to this is that brother was in the process of buying a new residence in 2024 when sister paid him some funds from her mortgage loan, so perhaps there's an argument to be made that she did in fact make a gift to brother to help him with the purchase of his new residence. But neither party filed a timely Form 709 as an expression of their intent to gift the property or the money.
