Gift Deed Forms & Complete Guide

Scenario: Parents want to give their $400,000 home to their daughter to help her family.

Process:

1. Parents gift as joint donors ($36,000 exclusion for 2024)
2. Must file Form 709 for $364,000 excess
3. No tax due if under $27.22M lifetime exemption
4. Daughter inherits parents' original basis for capital gains

Scenario: Husband wants to add wife to title of home he owned before marriage.

Process:

1. Execute gift deed from husband to "husband and wife"
2. No gift tax between spouses (unlimited exemption)
3. Consider as joint tenants with survivorship
4. No Form 709 required for spousal gifts

Scenario: Donor wants to give vacant land worth $200,000 to local church.

Process:

1. Verify charity's 501(c)(3) status
2. Get qualified appraisal for deduction
3. Execute gift deed to charity
4. Claim charitable deduction on Schedule A

Scenario: Elder parent wants to gift home to children to qualify for Medicaid.

Process:

1. Gift creates 5-year penalty period
2. Medicaid will calculate penalty based on value
3. May become ineligible when most needed
4. Consider irrevocable trust instead

For 2024, you can gift $18,000 per person per year without filing a gift tax return. Married couples can jointly gift $36,000. Gifts above this require Form 709, but no tax is owed unless lifetime gifts exceed $13.61 million (2024). Between US citizen spouses, there's unlimited gifting with no tax.

No, gift deeds are irrevocable once delivered and accepted. Unlike a will, you cannot change your mind. The only way to get property back is if the recipient voluntarily deeds it back to you. Courts rarely void gift deeds except for fraud, undue influence, or lack of capacity.

The key difference is tax basis. Gift recipients get the donor's original basis (carryover basis), potentially owing capital gains on appreciation since original purchase. Inherited property gets "stepped-up basis" to fair market value at death, eliminating capital gains on prior appreciation.

Most states exempt gift transfers from transfer tax, but you typically must file transfer tax forms declaring the exemption. Some states require documentary stamps even on gifts. Check your local requirements as they vary significantly.

You can gift your ownership interest, but the mortgage remains your responsibility. Most mortgages have "due on sale" clauses triggered by transfers, allowing the lender to demand full payment. The recipient doesn't automatically assume the loan. Consult your lender before gifting mortgaged property.

For gifts to family, a quitclaim deed is usually sufficient and common. For gifts to charity or non-family where you want to provide title protection, use a warranty deed. Either works legally for gifts—the choice depends on whether you want to guarantee clear title.

Medicaid has a 5-year "lookback" period. Any gifts made within 5 years of applying for Medicaid can create a penalty period of ineligibility. The penalty length depends on the gift value and state's monthly care costs. Gifting to qualify for Medicaid requires careful planning with an elder law attorney.

No, the IRS looks at fair market value, not stated price. A $1 sale of valuable property is treated as a gift of the difference between $1 and fair market value. This "bargain sale" is part gift, part sale, with gift tax rules applying to the gift portion.