Client sent his mother in law $60k to buy a condo 20 years ago but never filed form 709 gift tax return. Client and wife are not on title but are in will to inherit the condo. Also they had use and defacto ownership of condo as they made all decisions related to it. During the past 20 years mother in law got a green card. Mother in law has not filed taxes because she never made over the standard deduction (she just has a small foreign pension as income). Mother in law has lived with client and spouse off and on in the US over the past 20 years. Now the client is helping mother in law sell condo and buy another. Mother in law will file taxes in year of the sale to report the capital gains but it will be zero. Obviously 709 should have been filed 20 years ago. Should they file the 709 and "make up" for the late filing by claiming as gift amount the appreciated value of the condo ($120k) as a gift instead of the orginal amount?
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They may want to talk to a lawyer about filing a 20 year old gift tax return.
They gifted $60k in cash. They didn't gift a $120k condo. If she's selling for $120k and purchased it for $60k, why will they capital gain be $0?"Taxation is the price we pay for failing to build a civilized society." ~ Mark Skousen -
Meant the tax on the capital gain will be zero due to her income.Originally posted by Anarchrist View Post"Dude, you are correct" Rapid RobertComment
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