My grandmother owned a piece of property worth 1.5 million dollars. She is 86 years old. She had transferred the property into a living trust. For some reason that she now regrets, she gave the property to her children to include my mother. They did a "Quit Claim Deed". At the time, we didn't think much about it. But, I have learned from my accountant that she has to pay gift tax on the amount over 1 million. Worst, I was also told by the same accountant that she will lose a "Step Up in Basis" had she left the property in the trust.
My question is whether there is anyway to rescind the gift? Can I ask a court to do something? She is pretty sharp for her age but had NO idea what she was doing.
Do we have to notify the IRS or the State (of Washington)? Suggestions?