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Gift Tax return required - gift with Life estate

  • 1.  Gift Tax return required - gift with Life estate

    Platinum Most Valuable Member
    Posted 06-19-2019 10:09
    Hi

    A parent is gifting the home to a child, but retaining a life estate.  Would a gift tax return be required at time of transfer ?
    or does the fact that it is an incomplete gift and therefore no reporting is necessary at that time.

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    Abby Alhante
    KURCIAS & ALHANTE, CPAs LLC
    Melville NY
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  • 2.  RE: Gift Tax return required - gift with Life estate

    Posted 29 days ago
    I believe that there is a completed gift for the remainder interest once the deed is updated.  So I think you do need a gift tax return.

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    Honorine Campisi CPA
    SANDRA G. JOHNSON, CPA
    Bellmore NY
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  • 3.  RE: Gift Tax return required - gift with Life estate

    Silver Most Valuable Member
    Posted 29 days ago

    This is a great situation. You file a gift tax return at a discount for the value of the life estate. 

    When the life estate terminates due to death of the remainderman you get a full step up in basis aa of DOD or 6 months later. 


    Stuart G. Lang, CPA

    Sent via the Samsung Galaxy S8 Active, an AT&T 5G Evolution capable smartphone





  • 4.  RE: Gift Tax return required - gift with Life estate

    Bronze Most Valuable Member
    Posted 29 days ago
    Abby

    yes you would have to file a gift tax return for the excess of the annual exclusion--consider a QPRT with your attorney to reduce the lifetime exclusion used in the gift tax filing

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    Scott Sanders CPA
    GETTRY MARCUS CPA, PC
    Woodbury NY
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  • 5.  RE: Gift Tax return required - gift with Life estate

    Platinum Most Valuable Member
    Posted 29 days ago

    I would like thank everyone for their comments.  The question of the gift tax return has been resolved.

     

    But there is a related post regarding basis.... Perhaps you have time to view that too...

     

     

    Regards to all

     

     

    Abby

     

    Abby Alhante,  CPA

     

    Kurcias  & Alhante, LLC  CPAs

    525 Broadhollow Road   Suite 104

    Melville NY  11747

    516.829-5890  Fax 516-829-3976

    Mobile 516-381-9301

    AbbyA@KurciasAlhanteCPAs.com

    ( E mail response preferred )

     






  • 6.  RE: Gift Tax return required - gift with Life estate

    Silver Most Valuable Member
    Posted 29 days ago
    I usually recommend a Medicaid Qualifying Trust with proper provisions in order to retain the 121 exemptions - this is very important to discuss with your client.​  In many cases the house needs to be sold prior to death and the exemption is essential to retain.

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    Robert Barnett
    CPA, ESQ.
    Capell Barnett Matalon & Schoenfeld LLP
    JERICHO NY
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