@simonhd11 wrote:
I was wondering if I were to be gifted a property by my parents, there is no tax imposed on my parents or myself but instead it gets deducted from my $11.7 Estate tax exemption correct?
Your parents, as donors, would likely be required to file a Form 709 (gift tax return) and the amount that exceeds the annual exclusion would be deducted from their lifetime exemption (thanks to Mike9241 for the clarification).
See https://www.irs.gov/instructions/i709#en_US_2021_publink16784xd0e314
@simonhd11 wrote:
If so, could I still qualify for the home sale exclusion for a property that was gifted to me as long as I live there for 2 of the last 5 years?
That is correct. However, assuming the fair market value at the time of the gift was greater than your parents' adjusted basis, you would take their adjusted basis in the property (which may be rather low if they have owned the property for a number of years) to figure a gain.
See https://www.irs.gov/publications/p523#en_US_2020_publink10008938
