The following is from a recent stroy in the Wall Streete Journal. http://on.wsj.com/mhCMiT
Apparently, the IRS will be reviwing land records in seach of individuals that gifted real estate without filing a gift tax return.
The Internal Revenue Service has a low-profile but sweeping effort under way to use state land-transfer records for evidence of omissions in reporting gifts of real estate to family members. The IRS intends to search land records to indentify individuals who have made transfers of real property without filing a federal gift tax return.
Anytime we assist client with making gifts of any kind, we also prepare the federal gift tax return (Form 709) to report the transfer. Under current law, gifts to an individual in excess of $13,000 in a single year must be reported on the gift tax rerturn. In 2011, there will be no gift tax due unless the total amount of gifts made by the taxpayer during his or her lifetime is in excess of $5 million. The gift tax return is how the IRS keep track of the gift made over the course of an indivuals lifetime.
Please keep in mind the obligation to file the gift tax return when making gifts. Apparently, the IRS is taking more aggresive steps to enforce these rules. Click on this link to our website to view several informative articles on estate and gift tax rules during 2011 and beyond. You may also click on the 2010 changes to estate and gift tax laws to go directly to an article reviewing the law signed by the President at the end of 2010.
Holden Campbell, LLC Annapolis Estate Planning Attorneys