R4 Gifts (W) Flashcards
The Gift Tax (Form 709)
Tax is paid by the person giving the gift
Annual Inflation-Adjusted Exclusion
In determining the amount of gifts made in a calendar year, the donor may exclude the first $14,000 of gifts made to each donee or $28,000 from a married couple
Unlimited Exclusion for Gifts (CHEM)
Charitable gifts
Payments made directly to a Healthcare provider for medical care
Payments made directly to an Educational institution
Marital deduction
Present Interest Gifts
Qualifies for the annual exclusion
Outright gifts of cash or property
Trust income interests where annual or more frequent distribution is mandatory
life estates
Unrestricted transfers of life insurance policies
Future Interest Gifts
A present interest without ascertainable value does not qualify for the annual exclusion
Reversions
Remainders
Trust income interest where accumulation of income by a trustee is mandatory and accumulations are distributed at some future time at the discretion of the trustee
Complete Gifts
Qualify for the annual exclusion and in most cases are not considered part of the gross estate at death
Donee is not born yet
Property may revert back to owner
Incomplete Gifts
Included in the gross estate for purposes of computing the estate tax
A gift is not considered complete (and is not subject to gift tax) if it is conditional or revocable
Conditional Gifts
A gift that is subject to conditions precedent and will not be provided until the conditions have been met
Revocable Gifts
A gift that the owners reserves the right to revoke the gift or change the beneficiaries
Generation-Skipping Transfer Tax (GSTT)
Designed to prevent an individual from escaping an entire generation of gift and estate tax. This is a separate tax that is imposed in addition to federal and estate gift tax. The tax applies when individuals transfer property to a person who is two or more generations younger than the donor or transferor. It is paid by the trustee or transferor.
