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Posted by Stuart Bronstein on March 14, 2008, 1:34 am
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> I will spare you the details on why I want to do this, but I want
> to give my wife a brokerage account in my name and take one from
> her. (has to do with estate taxes and portfolio
> diversification...)
I'm interested in the details. Without them it sounds like a pretty
screwy way to do estate planning and portfolio diversification.
> My accountant says I have to file gift tax returns for these,
> eventhough they are not taxable, to document how we came to have
> them.
>
> This seems silly to me, but that doesn't mean it isn't necessary.
> Whatcha think?
Again, it depends on the background facts. Technically a gift tax
return is not necessary. But if you are doing something that's not
quite legitimate and you want the statute of limitations to start
running on the IRS's ability to audit you later, filing gift tax
returns might be helpful.
> Obviously we could just liquidate them and reinvest to simulate a
> trade, but I expect the transaction fees will cost more than the
> tax returns.
Whether it's a trade (in which you might incur income tax) or a gift,
liquidating and reinvesting is probably unnecessary to the legal issue
you are addressing, so you should decide on whether to do that
separately.
Stu
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