Gift Tax Planning for Tiburon Residents

Start with the decision that could change your next step

Before making or documenting a transfer, identify the question you need answered: who owns the property, who has authority to transfer it, or whether another person’s agreement or involvement may be needed. Those details can affect how a proposed gift fits with your estate plan and what tax-reporting questions to take to a tax practitioner.

For example, if you are considering a gift of property held with someone else, first clarify the ownership and authority questions rather than assuming you can transfer the entire property. This is a planning example, not a conclusion about any particular asset or person’s rights.

Separate reporting questions from tax payable

Federal gift-tax reporting and whether gift tax is payable are distinct questions. The answer depends on the gift and the applicable rules, so a reporting question alone does not establish that tax is owed. The donor is generally responsible for federal gift tax.

Because the result depends on the facts and current rules, do not rely on a general estimate or assume that a gift will produce a particular tax outcome. The IRS directs people with unresolved gift-tax questions to a tax practitioner.

Prepare a useful transfer summary

Before a planning discussion, assemble a straightforward record of what you are considering and what has already been transferred. A clear summary can help separate the ownership and authority questions from the federal reporting questions.

• Describe each proposed gift, the property involved, its current owner or owners, and the intended recipient.
• List previous transfers you believe may be relevant, with the dates and property descriptions you have available.
• Note any uncertainty about who may authorize a transfer or whether another owner should be involved.
• Write down the questions you want addressed about coordinating the transfer with your estate plan and whether to consult a tax practitioner.

Coordinate planning and tax questions

Estate-plan coordination can help you consider how a proposed transfer relates to your broader arrangements. It does not, by itself, determine whether federal gift-tax reporting is required or whether tax is payable. Keep those as separate questions, and bring unresolved federal tax issues to a tax practitioner.

A useful next step is to discuss the transfer summary and clarify which ownership or authority issue needs attention before proceeding. Codi M. Dada Law Office P.C. serves Tiburon clients virtually from its Novato office.