You won’t owe gift tax. You still need the appraisal.

The number that stops the conversation

For 2026 the federal lifetime estate and gift tax exemption is $15,000,000 per individual, $30,000,000 for a married couple, and the annual exclusion is $19,000 per recipient — $38,000 where spouses elect to split gifts. Those figures were set by the One Big Beautiful Bill Act, which raised the exemption rather than letting the scheduled 2025 sunset take it down.

Almost nobody reading this will owe federal gift tax. A parent can deed a Fort Worth house to a child and use a fraction of a very large exemption. So the reasonable conclusion is that if no tax is due, nothing much is required.

That conclusion is half right. No tax is due. Something is still required, and it is not the part people expect.

Filing is not the same as owing

A gift above the annual exclusion has to be reported on Form 709 whether or not any tax is payable. The return is how the transfer gets recorded and how the exemption gets applied against it. Real property is almost always well above $19,000, so a deed to a child is a reportable gift in essentially every case.

The return asks what the property was worth on the date of the gift. That is the whole question, and it is the one that gets answered casually — a tax district value, a number off a website, a friend’s guess — because no tax is riding on it.

The clock only starts if the gift is adequately disclosed

The IRS generally has three years to assess gift tax on a reported gift. But under Treas. Reg. §301.6501(c)-1(f), that three-year period only begins to run if the gift was adequately disclosed on the return.

If it was not adequately disclosed, the regulation says gift tax on the transfer may be assessed, or a collection proceeding begun without assessment, at any time. There is no closing date. A transfer made this year can be reopened and revalued in twenty years, which in practice means it gets examined when the parent dies and the estate is under review — the moment when the people who could explain the number are no longer available to explain it.

That is the actual risk in a family transfer of real estate. Not tax. An open file that never closes.

What adequate disclosure requires

The regulation is specific. The return has to describe the property transferred and any consideration received, identify the transferor and transferee and the relationship between them, supply the trust instrument or its terms where a trust is involved, and give a detailed description of the method used to determine fair market value — including the financial data relied on, any restrictions considered, and any discounts claimed.

It also requires a statement describing any position taken that is contrary to a Treasury regulation or revenue ruling. In other words: show the work, and flag anything unusual about how you did it.

Or an appraisal that satisfies the regulation on its own terms

In place of that detailed valuation description, the return may include an appraisal — but the regulation sets its own test for what counts.

The appraiser must hold themselves out to the public as an appraiser or perform appraisals on a regular basis, must be qualified to appraise the type of property by background, experience, education and professional membership, and must not be the donor, the donee, a member of the family of either, or an employee of any of them.

The report itself must state the date of the transfer, the date the appraisal was made, the purpose of the appraisal, a description of the property, the appraisal process, the assumptions and limiting conditions, the information considered, the procedures followed, the valuation method and the reasoning behind it, and the specific basis for the value — the regulation gives specific comparable sales as its example.

That list should look familiar. It is a USPAP-compliant appraisal report described in tax language.

The clause people skip

The independence requirement is the one that quietly disqualifies most of what families actually use. A brother-in-law who sells real estate is a family member. A friend who is an agent is not an appraiser. An automated estimate holds itself out as nothing at all.

The rule is not there to be difficult. The point of an appraisal in a gift file is that a disinterested professional, subject to standards, reached a number that can be tested later by someone who was not in the room. A number produced by a party to the transfer cannot do that job, which is why the regulation says so directly.

Why this is coming up more often

The National Association of Realtors’ 2025 Profile of Home Buyers and Sellers, covering July 2024 through June 2025, put the first-time buyer share at 21 percent — a record low — and the median first-time buyer age at 40. The median repeat buyer was 62. Twenty-two percent of buyers used a gift or a loan from family or friends toward the down payment, and 30 percent of repeat buyers paid all cash.

A generation with equity is moving property toward a generation without it. Most of that help is cash, and cash toward a down payment is a lender documentation question, not an appraisal question. But when the house itself moves — deeded outright, sold below market, or retitled to add a child — a value has to be established and defended, and that is a different problem with a federal regulation attached to it.

What I need to do the work

The property address, the date of the transfer or the date you expect it, the intended use, and the name of the CPA or attorney preparing the return so the report reaches them in the form they need. If the transfer already happened, the effective date is that date and the assignment is retrospective — routine work, but it depends on evidence of the property’s condition then, so photographs, listings, permits and invoices help.

I quote a written fee and a delivery date before anything begins. IRS and gift-tax assignments start at $600 for a retrospective effective date. I do not decide whether you should make the gift, how much exemption to use, or whether a discount applies to what you are transferring. Those are your CPA’s and your attorney’s decisions. I establish what the real estate was worth on the day it moved, and I document it well enough that the file can close.