My mother bought a house and gifted to me. She wanted my name on the purchase paperwork, but then legally transferred me her "share". How do I report the property gift?

[Anonymous_ · Accepted solution]

How do I report the property gift?

Gifts in excess of $17,000 ($16,000 for gifts made in 2022) to any one individual are reported on Form 709 by the person making the gift (the donor) which, in this case, would be your mother. Recipients of gifts do not need to report them, generally.

See https://www.irs.gov/instructions/i709#en_US_2022_publink16784xd0e314

Also, note that TurboTax does not support Form 709.

[Vanessa A]

You do not report a gift received (assuming this was done in the US).  Gift givers may need to pay a gift tax, the gift recipient does not pay or report anything. 

When you sell the house, you will report the sale and use the cost basis of the house as what your mom paid for the house since she gifted it to you shortly after the sale.

Your mom will need to report this using form 709 since the house likely cost more than $16,000.  

[jtax]

The reason why the receiver of a gift does not report the gift for income tax purposes is that I.R.C. 102(a) says: "Gross income does not include the value of property acquired by gift, bequest, devise, or inheritance." https://www.law.cornell.edu/uscode/text/26/102

The reason why the giver of a gift has to report it is because there is a different tax on gifts given during life (gift tax) and gifts given at death (estate tax). The reason there is a gift tax is to stop people from avoiding the estate tax by giving away all of their assets just before they die. So gifts made during life are all added to one's estate to determine the taxable estate. 

The $17k/$16k "annual gift exclusion amount") is there to make the system more workable -- small gifts don't need to be reported. 

So the gift tax return/reporting does not mean there is any gift tax. For gift tax to be due the total of all lifetime gifts needs to be well over $12 million (scheduled to revert talk half of that in 2026). So most people don't need to worry about paying the tax. Filing the gift tax return for gives over the $17k/$16k annual amount is required even though no tax is due.

[Anonymous_]

Just so it is clear, the gift tax and estate tax parallel each other (Section 2001) and gifts equal to, or less than, the annual exclusion are not added to one's estate to determine the taxable estate.