If you made gifts last year, you may (or may not) need to file a gift tax return
Gifting assets to loved ones is one of the simplest ways of reducing your taxable estate. However, what may not be as simple is determining whether you need to file a gift tax return (Form 709). With the April 17 filing deadline approaching, now is the time to find out an answer.
A federal gift tax return (Form 709) is required if you:
Return not required
No gift tax return is required if you:
If you transferred hard-to-value property, such as artwork or interests in a family-owned business, consider filing a gift tax return even if you’re not required to. Adequate disclosure of the transfer in a return triggers the statute of limitations, generally preventing the IRS from challenging your valuation more than three years after you file.
In some cases it’s even advisable to file Form 709 to report nongifts. For example, suppose you sold assets to a family member or a trust. Again, filing a return triggers the statute of limitations and prevents the IRS from claiming, more than three years after you file the return, that the assets were undervalued and, therefore, partially taxable.
Contact us if you made gifts last year and are unsure if you should file a gift tax return.
Copyright © Rich, Wightman & Company, CPAs, LLC | All Rights Reserved
1301 South Jones Blvd. Las Vegas NV 89146 US