1.when you give a gift of more than $14,000 per year per person, you are required to file a gift return. No taxes actually owed, unless your lifetime gifts plus estate exceed $5 million. But you have to file the report.
2. If you receive gifts from foreign persons totaling more than $100,000 per year, or from a foreign corporation of more than $14,000 per year, you must file a report using form 3520. No tax is owed, but the IRS requires the form in order to track large foreign transactions, to help them find things like money laundering etc.
3. It sounds like you are actually selling your house to your sisters family, and trying to disguise the sale through the use of reciprocal gifts. If this is what you are doing, and if the IRS figures it out, you will be responsible for capital gains tax on the sale of the house, plus substantial penalties for filing a false tax return. Even if this is not what you are doing, and these are legitimate independent gifts, it will look to the IRS very much like you are trying to disguise a sale, and if the IRS comes after you, you will have to put in substantial effort to defend yourself and prove that these are legitimate, independent gifts.
