Avoiding Gift Tax

[Bob Grant]

Hello BP Community,

My father-in-law would like to gift my wife and I his cabin. He doesn't care what we do with it (keep it and enjoy it or sell it). He owes on his mortgage about half the value of the cabin. We would take over the mortgage and put the cabin in our name. My objective with this cabin is to sell it and buy another cabin as a vacation rental property (the current cabin is part of an HOA that does not allow renting). The strategy I need to figure out is the best way to make this transfer of ownership happen with the minimal amount of taxes paid on the 'gift' portion (equity).

If anyone has any suggestions, please let me know.  If you also know of any good CPAs who deal in real estate in the SLC, UT area, I would appreciate a reference.

Thanks for reading and I appreciate any help!

Bob