One of my clients bought a house for her son few years back and now transferred on his name as a gift. what is the best and right way to treat this family deal in the Tax Return? This was the second house and the son was living there since they bought it.
Contracts?
Consideration?
Beneficial owners?
The right way would be according to law, the specific details of which are unknown.
IMHO, the file should be examined in detail by a tax partner familiar with all the aspects of property and tax law, including Pecore et al.
Such detailed specific examination is beyond the scope of an internet answer such as this.
Some liaison between the Client, the CPA, and the Lawyer seems likely a good idea, in view of the likely exposure to Taxable Capital Gains.
And also consider the applicable family law. This is not strictly a tax question. The legal considerations may affect the tax considerations.