Gifting a Home to your Daughter

[GodFather]

Client asked what tax implications my be inherent if he and his wife gifted a home they own to their daughter during 2025.  While I don't have significant experience with this, I did investigate it a bit and ask that you confirm my understanding is correct:

- Home is above the $19,000 / $38,000 amount but well below the lifetime exclusion.

- Will need to complete Form 709 for the gift.

- No tax implications for my clients or their daughter at the time of the gift.

- Is the daughters basis the original cost of the home?  Tax implications are based on when / if the daughter sells the home. 

- Daughter does not anticipate applying for Medicaid so there should be no issue in that regard.  

- Client is not looking to sell the home, for any amount, to their child. 

Am I missing anything?  Any other insights that may be worth mentioning?  

Thank you. 

[IRonMaN · Accepted solution]

Their cost becomes their daughter's cost.  Now is a good time to figure out what the real cost is. They should do some thinking about any improvements they have done since they bought the home so the daughter has a good number to start with.  Otherwise, you have it covered.

[GodFather]

Thank you, Sir.  I use that term loosely.  

[qbteachmt]

I would ask:

Is there a mortgage or HELOC or any financial stipulation on the property?

Is this the parent's own residence or some rental or a vacation home they never use? Will she be living there as her primary residence?

Is it transferring furnished?

[Skylane]

Assuming the parents are going to continue to reside in the home, the parents should be listed on the deed for life estate or tenancy rights.  It will enable the parents to continue to be eligible for a homeowner's HO3 type insurance policy (owner occupied) and (in many states) the parents will continue to be eligible for a variety of senior benefit rebates, programs, etc. that require home ownership. 

[George4Tacks]

Yes, 709  https://www.irs.gov/businesses/small-businesses-self-employed/frequently-asked-questions-on-gift-tax...

[abctax55]

"....Thank you, Sir.  I use that term loosely."  

Sounds as if The Godfather knows Jeff 😉

[IRonMaN]

Hey, I resemble that remark!  😜