Do I need to file form 709?

[Hoang111]

My mother and I just went back to Vietnam to transfer the deed of her house to me a few months ago. She is a green card holder and I passed the US citizenship test in 2022 so I am currently a U.S. Citizen. My question is do I need to file form 709 or any other forms because of what we did in Vietnam? Thanks.

[guywong]

Your mother, not you, needs to file a Form 709 for deeding the house in Vietnam to you, assuming the house (and all other gifts she may have given you) is valued more than $17,000, the annual exclusion amount for 2023.  The gift tax return is always filed by the donor, not the recipient.  For most regular folks, there is no gift tax due with the filing since the donor can use both the annual exclusion and lifetime exemption first ($12.92 million for 2023).  If a Form 709 is required, make sure you keep a copy in your "permanent" file as you may need to submit another copy of the 709 with your mother's Estate Tax Return, Form 706, upon her demise, to the IRS.  The fact that the house is located overseas is irrelevant.  Your tax basis in the house is the same as your mother's as there is no step-up in tax basis for gifts, unlike inheritance.

See the Form 709 instructions on Who Must File.

https://www.irs.gov/instructions/i709

[Hoang111]

It is quite hard for my mother to file form 709 because we do not know the basis of the house. The house was given to my mother by her father many years ago and we had lived in that house before we moved to the US in 2014. We might know the current price of the house but not the basis.

[Critter-3]

Use your best guess for the basis. 

[guywong]

Your mother's tax basis is the appraised value of house when she inherited it from her father.

[tagteam]

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@guywong wrote:

Your mother's tax basis is the appraised value of house when she inherited it from her father.

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Unfortunately, that is not what @Hoang111 wrote. Rather, the statement was that the property was given to @Hoang111's mother by her father; no mention of inheritance.

[guywong]

You're right.  I misread the post.  Sorry.  This is the problem with gifts "carryover basis".  

[Hoang111]

I plan to sell the house in the near future. Do I need to pay capital gains tax on it when I sell.

[tagteam · Accepted solution]

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@Hoang111 wrote:

I plan to sell the house in the near future. Do I need to pay capital gains tax on it when I sell.

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If you cannot determine the basis for the property (or cannot even generate a rough estimate), then your basis is $0 as far as the IRS is concerned and you will have capital gain to the extent your sales price (less selling expenses) exceeds your basis.