Hello and thank you for using Just Answer,Yes you can make a gift to your father and your father may in turn make a gift to you. The law on gift tax is, the gift tax is a tax on the transfer of property by one individual to another while receiving nothing, or less than full value, in return.It falls to intent. Are you gifting or are you selling the property?That is what the IRS would ask should they enquire.
When the IRS sees both the 709 forms then they will see the exchange. It is not a certainty that an audit would be made but what you are purposing is questionable.
This is what I suspected. What could IRS do if they decide the gift is intended as a gift but a sale in disguise. Would they slap a capital gains tax on what I received?
They would assess it under capital gain yes. You would only pat CG tax on the difference in basis and sale price (less expenses of sale).
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