Surprisingly this appears to be quite complicated. It seems to be that there are income tax consequences as well as gift tax issues depending upon the donor's basis in the property and whether the mortgage is more than the basis. Here is an article. This is not simple stuff. I would highly recommend that you seek the advice of an estate planning attorney to help you figure it all out. (CT and MN also appear to have gift taxes that might be relevant).
https://www.jkzllp.com/blog/2019/02/i-give-you-my-heart-and-my-home-gift-and-tax-income-consequences...
Also note that the unlimited gift exclusion for gifts to spouses does not apply to non-citizen spouses. Rather a "super" annual exclusion applies. Amounts over that will just reduce your lifetime exclusion, which is currently very large (> $12M).
"If your spouse is not a U.S. citizen, the marital deduction for gifts is limited to an annual exclusion of $164,000 for 2022. See IRC § 2523(i)."
https://www.irs.gov/businesses/small-businesses-self-employed/frequently-asked-questions-on-gift-tax...
**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"
