Q: My parents gifted my wife and I, a house, would I need a form 709, real estate attorney and/or CPA, or all of them?
My parents gifted us the house in 2020, how to we claim this? We're not going to sell it, rather we will sell our current house and use the equity and remodel the gifted house. We have lived in our current house for over 9yrs and it will be less than $500k, so capital gains tax shouldn't be an issue.
Would we still need to file form 709 and get a CPA or real estate attorney to handle filing 2020 taxes?
A: Your parents (the giftor) should file a gift tax return because the amount of the gift exceeds the exemption. The exemption is set at $15,000 per person. If your parents (two giftors) choose to gift split, and the gift is given to you and your wife, this allows for a $60,000 exemption ($15,000 times 4). If the value of the gift exceeds $60,000 your father will file a gift tax return. He may or may not pay gift tax depending on how many gifts he has made in the past. Your tax return will not be affected by the gift. However you will report a capital gain from the sale of your house (likely exempt from tax as well under Section 121). Your father should hire a CPA to prepare the gift tax return.
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