The reason IRS wants a valuation is because there is a gift limitation without tax. That amount for 2022 is a mere
$16,000. Anything above that is subject to tax.
That statement is just wrong.
Any gift given by any one individual to any other individual is required to be reported if the value of the gift given in 2021 exceeds $16,000. It's merely a reporting requirement.
Tax only comes into play when the total of all gifts given by an individual to another individual exceed $11.7M (eleven million seven hundred thousand dollars). Chances of that happening with your ordinary tax payer are small.
When gifting real estate, the value of the gift given is basically what the giver originally paid for it, plus the cost of any property improvements paid for by the giver. Depending on the type of real estate, other things may come into play also in determining the value of the gift.
