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Level 3
posted Apr 11, 2025 4:07:12 PM

Form 709 filing, gifting a house to Irrevocable Trust but trust can't sell the house

Hi Community,

 If someone transfers  a house to the Irrevocable trust but there is a clause in the trust saying that the house can't sold when the grantor is alive. Does the person need to file form 709?

My CPA is saying since the gift is not complete(can't see the house), form 709 is not required. There is another CPA has a different opinion.  What is your thought? 

Thanks

 

0 3 922
3 Replies
Level 6
Apr 11, 2025 4:16:34 PM

When a grantor transfers property or cash to a trust, whether that transfer is considered to be a gift depends upon the beneficiary(ies) and the terms of the trust.

 

Generally, an irrevocable transfer to a trust is a gift by the grantor to the beneficiaries. Here, however, there is a restriction (can't sell while the grantor is alive), but the beneficiaries are getting a "future interest" and there is a value that can be placed on that interest since that interest cannot be revoked (unless the trust specifies otherwise).

Level 3
Apr 11, 2025 4:30:26 PM

OP here.  want to add one addition information:

In the Trust Purpose section, there is a clause saying "to ensure all assets transferred to this Trust are incomplete gifts for federal gift tax purposes and included in our taxable estates at death"

Level 6
Apr 11, 2025 6:20:02 PM

The grantors can get away without filing a 709 here.