@AmeliesUncle help me out with understanding this please.
It has been my understanding and interpretation of the pubs (can't name the specific pubs at this time) that when you gift a rental property, you gift everything. That includes all carry over losses as well as depreciation. So with this gift of 1/2 the property, doesn't it all get split right down the middle and the giver basically "gives" the recipient half of everything? That would mean the recipient would use the same in-service date with 1/2 of the giver's cost basis. That would automatically figure the prior year's depreciation.
Take note that when the recipient enters it into TTX for the first time, one question asks how they acquired the property. The selection would then be "I received this rental as a gift" and then follow the prompts/screens from there.
@fullera I am highly confident that the value of your half of the property is more than $16,000. So your mother would be required to file IRS Form 709 - Gift Tax Return. Do not let the name of that form concern you. There will not be any tax paid on this gift by anyone, unless the gift is worth more than $11.7 Million ($12.06 Million if gift given in 2022) which I seriously doubt. The gift tax return form 709 is merely a reporting requirement that the giver is required to complete.
TurboTax does not support IRS Form 709. However, the giver can get a blank form at https://www.irs.gov/pub/irs-pdf/f709.pdf , file it out and mail it to the address in the instructions. Simple and done.
