Gifting Rental Home to Son

[PCH2]

In October 2023 I gifted a rental property (single family home) to my son. I know I have to complete an IRS Form 709 to account for the gift but how do I explain the home’s disposal in TurboTax? On the screen entitled “Do Any of These Situations Apply to This Property?”. The “Learn More” instruction located next to the “Sold” box says “Do not check this box if the disposition was to a related party”.

[KrisD15]

Report that it was converted to personal use. 

If there is any depreciation recapture, your son would need to address that. Your son's basis is your adjusted basis and your adjusted basis is your cost plus improvements less depreciation (taken or could have been taken)

Property INHERITED is stepped-up in value to Fair Market Value on date of passing, but gifts are valued at the donor's adjusted basis. 

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