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Subject Author Date
Gift Tax Question Ron Rosenfeld 03-08-2007
|--> Re: Gift Tax Question Stuart A. Brons...03-10-2007
Posted by Stuart A. Bronstein on March 15, 2007, 1:28 am
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>> You're talking here about one property. How do you give it
>> over several years? Have it surveyed and deed portions of
>> it each year? Cost prohibitive.

> I've not had any problems with joint ownership of other
> properties.
>
> I've sold an unrelated person a 50% ownership in a property
> I owned, in exchange for cash.
>
> Is there some reason that gifting cannot follow a similar
> process?

The potential problem with gifting is that the IRS could
come back and second-guess you in years to come. If you
don't file a gift tax return the statute of limitations
never runs on the gift.

But if you're careful you shouldn't have a problem.

Stu

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Posted by Ron Rosenfeld on March 16, 2007, 1:12 pm
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> The potential problem with gifting is that the IRS could
> come back and second-guess you in years to come. If you
> don't file a gift tax return the statute of limitations
> never runs on the gift.
>
> But if you're careful you shouldn't have a problem.

It sounds as if it should just be a matter of retaining the
appraisal, and filing an appropriate deed each year showing
the ownership transfer.

--ron

<< ======================================================= >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2006) - All rights reserved. >>
<< ======================================================= >>

Posted by Stuart A. Bronstein on March 16, 2007, 10:16 pm
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>> The potential problem with gifting is that the IRS could
>> come back and second-guess you in years to come. If you
>> don't file a gift tax return the statute of limitations
>> never runs on the gift.
>>
>> But if you're careful you shouldn't have a problem.

> It sounds as if it should just be a matter of retaining the
> appraisal, and filing an appropriate deed each year showing
> the ownership transfer.

Assuming you mean a yearly appraisal, that should do it.

You might also want to consider creating an irrevocable
trust to which you make modest gifts (e.g. $100) each year.
This would require a gift tax return to be filed, which
would start the statute of limitations running for each of
those years.

Stu

<< ======================================================= >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2006) - All rights reserved. >>
<< ======================================================= >>

Posted by Ron Rosenfeld on March 17, 2007, 6:30 am
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>>> The potential problem with gifting is that the IRS could
>>> come back and second-guess you in years to come. If you
>>> don't file a gift tax return the statute of limitations
>>> never runs on the gift.
>>>
>>> But if you're careful you shouldn't have a problem.

>> It sounds as if it should just be a matter of retaining the
>> appraisal, and filing an appropriate deed each year showing
>> the ownership transfer.

> Assuming you mean a yearly appraisal, that should do it.
>
> You might also want to consider creating an irrevocable
> trust to which you make modest gifts (e.g. $100) each year.
> This would require a gift tax return to be filed, which
> would start the statute of limitations running for each of
> those years.

Yes, I should have typed "appraisals", and not "appraisal".

Irrevocable trust? Well, one of these days I really have to
learn about trusts, and how they can help me and my wife.
One rule that has served me well over the years has been to
not put my money into anything I don't fully understand.
And I've never taken the time to really understand trusts.
Probably because what little I've read suggests to me that
they are of more value to those to whom I give money (heirs
or charities) than to myself or my wife. That may be
incorrect, but that suggestion has removed the urgency of
acquiring more knowledge.

Thanks for your suggestions.

Best wishes,

(Frequently wrong, never in doubt)
--ron

<< ======================================================= >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2006) - All rights reserved. >>
<< ======================================================= >>

Posted by Stuart A. Bronstein on March 18, 2007, 2:18 am
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> Irrevocable trust? Well, one of these days I really have to
> learn about trusts, and how they can help me and my wife.
> One rule that has served me well over the years has been to
> not put my money into anything I don't fully understand.
> And I've never taken the time to really understand trusts.
> Probably because what little I've read suggests to me that
> they are of more value to those to whom I give money (heirs
> or charities) than to myself or my wife. That may be
> incorrect, but that suggestion has removed the urgency of
> acquiring more knowledge.

There are different kinds of trusts and they are useful for
different kinds of purposes. The most popular, a revocable
living trust for estate planning purposes, is, as you
suggest, of little practical value until both spouses have
died. However by that time it's too late to save the tens
or sometimes hundreds of thousands of dollars that can be
lost to taxes and probate courts.

The reason I suggested an irrevocable trust is to have a
situation in which filing a gift tax return is required, to
start the statute of limitations. There may be another
option. If the gifts are going to be more than $12,000 per
donnee, and you don't live in a community property state,
you and your wife can file a gift tax return and elect to
"split" the gift. That is that the gift be considered half
from each of you even though tecnically the money not belong
to each of you equally.

Stu

<< ======================================================= >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2006) - All rights reserved. >>
<< ======================================================= >>

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