The IRS Estate and Gift Tax Program recently started working with state and county authorities in several states to determine if real estate transfers reported to them are unreported gifts.
Although a tax may not be due, a gift tax return may be required for real estate transfers above the annual exclusion amount.
The annual exclusion applies to gifts to each donee. In other words, if you give each of your children $11,000 in 2002-2005, $12,000 in 2006-2008, and $13,000 on or after January 1, 2009, the annual exclusion applies to each gift.
[Stacie says: Note: Each parent may gift up to the annual exclusion amount to their child. So in 2009, a child may receive a total of $26,000.]
Penalties will be considered on all delinquent taxable gift returns filed.
See information about: