Will we have to pay capital gains tax on the 50% equity (~$200k) my husband is gifting his adult children? Yes
Will my husbands' 2 adult children have to pay any taxes on the gift estimated at $100k each? No and they do not report the gift received on a tax return, regardless of the amount received.
He will have to file a Form 709 reporting the gifts given to each individual since the amount of the gift is greater than $18,000. He will not have to pay any gift taxes if his total gifts ever given is less than $13.61 million.
The Form 709 is separate from a tax return and is mailed to the IRS using the address in the Form 709 instructions.
TurboTax does not support IRS Form 709
IRS website for Form 709 - https://www.irs.gov/forms-pubs/about-form-709
This answer has been verified for accuracy by an Intuit expert employee
