Protecting Estates.
Protecting Legacies.

Need Help Preparing Your Gift Tax Returns?

Under a certain amount, some monetary transfers between individuals may be considered a gift and are not subject to taxes. According to the IRS, “Any transfer to an individual, either directly or indirectly, where full compensation (measured in money or money’s worth) is not received in turn” is considered a monetary gift. In other words, a “gift” is any sum of money transferred between two or more people not expected to be paid back by the receiver(s). There can be many exclusions, complications and other circumstances that make filing a gift tax return overwhelming. For this reason, it is highly recommended that you retain the counsel of an experienced gift tax lawyer.

As a comprehensive estate planning law firm, Temmerman, Cilley, Kohlmann & Norcia, LLP., assists with all matters involving gift taxes, including the preparation of gift tax returns. While many estate planning attorneys refer tax return preparation to outside accountants, our dual-licensed gift tax planning attorney, Patrick Kohlmann, is a certified public accountant (CPA). This certification allows our firm to handle estate and gift tax return preparation in house. This way, we can better ensure that our clients’ tax issues are being handled properly.

Are There Any Exclusions To Gift Taxes?

According to the IRS, “The general rule is that any gift is a taxable gift.” That said, as with many rules, there are exceptions that must be considered when filing a gift tax return. Typically, a gift tax return is required when you have made or received cash, fractional interests in real property (i.e., your house, business and the physical property each is on) and business interests that you are not required to pay back. There are, however, exclusions to be considered when filing. For example, did you know that there is a generation-skipping transfer tax on gifts to minors? It is generally triggered when grandparents transfer gifts to grandchildren or great-grandchildren, skipping generations in between.

There are many other exclusions to gift taxes that may apply to your particular circumstances. The most common exclusions include:

  • Gifts to spouses
  • Gifts of funds under the yearly exclusion amount
  • Certain transfers to minors
  • Some educational, political, charitable and medical transfers

If a gift is not subject to federal gift tax, then no gift tax return must be filed. However, you may be able to reap benefits from filing a gift tax return even when it is not required by the IRS. Our professional tax attorney can help you identify any exclusions to your gift tax return as well as advise you on whether to file one at all.

What Is The ‘Lifetime Exemption’ For Gifts?

This exemption refers to the amount that a person can gift over the course of his or her lifetime. If you are considering gifting someone a sum of money, be aware that this limit changes regularly. It is important to research the current amount deemed by the IRS if you are planning to give continuous gifts over the span of years (or one very large gift). If planned correctly, you can give a large sum of money (up to the gift tax exclusionary amount, of course) as a gift every year and never be in danger of hitting this limit. However, that is only if you go through the proper motions when giving monetary gifts. Note that this lifetime exemption amount is doubled for married couples giving “joint gifts” (also commonly referred to as a “split gift”).

Since the lifetime exemption amount is subject to change, and often does, the best way to ensure that your gift plan and/or tax return maintains its legality is to hire a certified gift tax lawyer. He or she can use resources to ensure that you are ever in danger of exceeding this amount.

Questions About Filing Your Gift Tax Return? Call Us Today.

Our talented gift tax lawyer, Patrick, has been offering legal tax advice to fellow Californians for over a decade. He has experience preparing all kinds of gift tax returns and aims to help every client avoid gift tax controversies with the IRS. When controversies do occur, Patrick, along with our San Jose firm, offers full-service representation. We will work tirelessly to achieve a favorable outcome for each client, dealing directly with the IRS on our client’s behalf and/or assisting with the strategic and meticulous management of an appeal or audit.

If you have questions concerning gift taxes and/or your gift tax return, contact our office to schedule a consultation with Patrick today.