Q: what happens if you never filled out form 709, when you transferred deed as a gift
My sister transfer deed for her condominium to her son back in 2009, Quitclaim deed was created, she did as a gift
but never filled out gift tax return form, how to fix it?
A:
You can file it late, the penalty is based on the tax owed at the time of filing. IRC § 6651(a)(1). So if no tax would have been due then there's
In 2009 the lifetime exemption was 3.5MM so as long as the fair market value was less than that amount, reduced by any mortgage and the annual exclusion of $13,000 at the time, then there would not be any tax due.
The value of the gift would reduce the current lifetime exemption of 11.4MM.
Bruce Alexander Minnick agrees with this answer
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