When people with taxable estates are trying to reduce their estate tax burden by making an inter-vivos gift they will need to properly prepare a federal gift tax return (Form 709). There can be many nuances in the details when people are filling out gift tax returns and they need to be careful to avoid any of the common traps that are mentioned in this column. They need to be sure to provide an adequate disclosure of any gift that they provide. A person who is filling out a gift tax return will also need to avoid failing to properly allocate their generation skipping transfer (GST) tax exemption. It is also important to not make an inappropriate election of gift splitting to third parties and to adequately report any sales that are made. This column discusses many of the important requirements that need to be met with gift tax returns.
See Michelle L. Ward, Six Traps to Avoid When Preparing Gift Tax Returns, Wealth Management, February 1, 2016.
Special thanks to Jim Hillhouse for bringing this article to my attention.
