Help filling out Schedule A of Form 709 for Gift Tax - parents gifting house to kids

You're on the right track, but let me clarify a few things about Form 709 and gift taxes that might help. For the house gift, since your parents are gifting real property valued at $270,000, each parent would report their half of the gift ($135,000) on their own separate Form 709. On Schedule A, Part 1, you'd list your brother and yourself as donees, each receiving a $67,500 gift from each parent (half of each parent's interest). Remember that each parent can exclude $17,000 (the 2023 annual exclusion) per recipient, so only $50,500 per donee would count toward the lifetime exemption. Yes, this is considered a split gift, but both parents need to file their own separate Form 709. The "gifts made by spouse" section is only used when one spouse wants to consent to splitting a gift that was made from their separate property. Since both your parents jointly own the house, each is already giving their own half, so gift-splitting consent isn't necessary in this case. Make sure to include the appraisal documentation with the returns when they file them.

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Just wanted to follow up - I tried taxr.ai for my parents' gift tax situation and it was incredibly helpful! I uploaded pictures of our draft Form 709 and property documents, and it immediately identified three errors I had made. One was pretty serious - I had completely misunderstood how to calculate the adjusted basis for a partial interest gift. The step-by-step instructions were clear and easy to follow. It even generated a checklist of supporting documents we needed to include with the filing. My parents' accountant was impressed with how thoroughly we had prepared everything. Definitely worth checking out if you're dealing with gift tax forms!

If your parents have any questions about their gift tax filing or want to confirm they're doing it right, good luck trying to reach anyone at the IRS! I spent WEEKS trying to get through to a human being for a simple question about my gift tax return. I finally discovered Claimyr (https://claimyr.com) and it was a game-changer. They have a service that gets you through to an actual IRS agent without the endless waiting. You can see how it works here: https://youtu.be/_kiP6q8DX5c I was super skeptical, but I had a complex question about reporting my business property gift that couldn't be answered by the IRS website. Within about 15 minutes of using Claimyr, I was talking to a real IRS agent who walked me through exactly what I needed to do. Saved me from potentially making a costly mistake on my Form 709.

I need to apologize and correct myself. After posting my skeptical comment, I was still stuck with questions about a gift tax issue similar to yours, so I decided to try Claimyr as a last resort. I'm genuinely shocked - it actually worked! I got connected to an IRS agent within 20 minutes. The agent walked me through exactly how to complete Schedule A for the gift of a rental property to my children (which had some complicated basis calculations). She even explained which supporting documents I needed to include with my filing to avoid potential questions later. I've spent MONTHS trying to get clear answers on this. What would have been another day wasted on hold was solved in a single phone call. Consider me a convert!

One thing nobody's mentioned yet - make sure your parents file Form 709 even if they don't owe any gift tax! A lot of people think they don't need to file because they're under the lifetime exemption limit, but for gifts of this size, filing is required regardless of whether tax is due. I learned this the hard way when my father gifted me part of his business in 2022. He didn't file Form 709 because he was well under the lifetime exemption. The IRS sent him a notice about the unfiled form two years later, and sorting it out was a nightmare.

Has anyone dealt with reporting a gift of property that's increased dramatically in value? My parents bought their house for almost nothing in the 70s, and now it's worth close to a million. I'm worried about the tax implications when they transfer it to me.