Thanks for the reply. So the lifetime exemption of $11.68mm has not been breached, so if I filed a form 709, there would be no tax due at all. But I never filed a form 709.
I read the article you sent and found this statement:
"If you fail to file the gift tax return, you’ll be assessed a gift tax penalty of 5 percent per month of the tax due, up to a limit of 25 percent. If your filing is more than 60 days late (including an extension), you’ll face a minimum additional tax of at least $205 or 100 percent of the tax due, whichever is less.
So there is no tax due to begin with on the gift as it is below $11.68mm, so they will penalize me 5% of $0 in taxes due which is $0? If I file 2 years after the transfer, I will face a minimum of $205 or 100% of tax due (100% of $0), which ever is less so again I will have to pay $0?
I also found this post which also states that no penalty/tax is due for late filing of form 709, if there was no gift tax due to begin with.
https://ttlc.intuit.com/community/taxes/discussion/re-can-a-late-gift-tax-return-for-previous-years-...
It was not a sale as there was no broker, sales agreement involved, and was only a transfer of the deed. It would be hard to argue that it was sale, and there was not capital loss/gain recorded from the transfer from either party.
