There is a blurb in the latest issue of the Kiplinger Tax Letter reporting that the Internal Revenue Service estimates that 60% to 90% of people who gift real estate fail to file a gift tax return for the transfer.
So the I.R.S. is now going after these people. They are currently reviewing real estate transfer records in 15 states, and Connecticut is one of them.
Just a refresher: whenever you make a gift in excess of $13,000 in value you have to file a Form 709 gift tax return with the I.R.S., even though a tax payment isn't due for the transfer.
Please note that you will not get a letter from the I.R.S. informing you of the need to file a return; you have to take the initiative and file it.
So...if you've gifted real estate to anyone for less than fair market value you may want to contact your accountant.