He owes nothing in gift taxes. First, the first $13,000 of this gift qualifies for the annual donee exclusion. As to the remaining $37,000, he will use some of his $5 million lifetime exemption. So there is no gift tax to be paid. He will in fact have to file a Form 709.
As an aside, you do realize that you must use a carryover basis (what dad paid plus improvements) to determine the gain if you later sell this property. If you received this house at his death you would have gotten a step up in basis to the date of death value (assume $50,000). If you later sell you would have little or no gain. So if dad paid little for the house and made only minor improvement, the gift made will result in higher capital gains if you sell it later.
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As the donor your father will have to file a gift tax return. He is entitled to an annual exclusion of $13,000 for gifts made to you in a given year, and it could double to $26,000 if he is married. The difference must be reported on a gift tax return. Your father has a life time gift exclusion that is currently $5,000,000 and he can use this to exclude the balance of the gift if he has not already used up this exclusion. If he has sufficient exclusion available, then he should owe nothing in gift tax. Your basis in the property for income tax purposes will be a carry over basis -- the same basis that your father had immediately before transferring the property to you.
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