Helping Clients Navigate Federal Gift Tax Reporting
Lifetime gifting can be an effective way to transfer wealth to children, grandchildren, trusts, charities, and others. Depending on the nature and value of a gift, however, the transfer may also require the filing of a federal gift tax return. A gift tax return does not necessarily mean that gift tax is actually owed. In many cases, the return is used to report the transaction and document the use of a portion of the donor’s available federal gift, estate and generation skipping transfer tax exemption.
At Cook Tillman Law Group, we assist clients with the preparation of federal gift tax returns, commonly filed on IRS Form 709, and help clients understand how lifetime gifts fit within their broader estate and tax planning.
When Might a Gift Tax Return Be Required?
Federal gift tax rules can apply to much more than a simple transfer of cash. Gift tax reporting may arise when transferring real estate, business interests, investment assets, interests in trusts, or other property.
Gift tax returns may be required or advisable in connection with:
• Gifts exceeding the applicable annual gift tax exclusion
• Gifts of real estate or interests in closely held businesses
• Transfers to irrevocable trusts
• Gifts involving valuation discounts
• Gift-splitting between spouses
• Certain gifts of future interests
• Transfers involving generation-skipping tax planning
• Large lifetime gifts intended to use a portion of the donor’s federal exemption
Accurate reporting is particularly important when the property being transferred is difficult to value. Business interests, family entities, and real estate may require a qualified appraisal or other valuation documentation to support the amount reported on the return.
Coordinating Gift Tax Reporting with Your Estate Plan
Gift tax planning should rarely be considered in isolation. A significant lifetime gift can affect the amount of exemption available at death, the recipient’s tax basis, the eventual administration of an estate, and the operation of existing trusts and other estate planning documents.
Our attorneys work with clients, accountants, appraisers, and financial advisors to make sure significant gifts are properly structured, documented, and reported. For clients implementing more sophisticated gifting strategies, we can coordinate the planning and the resulting gift tax returns as part of a comprehensive estate plan.
Contact Cook Tillman Law Group if you have made a significant gift, are considering a lifetime gifting strategy, or need assistance preparing a federal gift tax return.
YOUR PRIVACY IS IMPORTANT
At Cook Tillman Law Group, we understand your desire for privacy. Many of our clients are business owners, wealthy individuals, entertainers, and high-profile public figures, and we do all we can to protect your privacy as well as your interests.
You can rest assured that we will keep your personal affairs in strict confidence. We commonly create trusts and other planning vehicles that are designed to keep your name and your holdings private.