Portola Gift Tax Planning for Proposed and Past Transfers

Start with the donor and the transfer

For federal gift tax, the donor is generally responsible. That makes it useful to identify who made, or is considering making, each transfer before discussing reporting. Keep the donor, the intended recipient, and anyone named in an estate-planning document distinct in your notes; then identify what you need to clarify about each person’s role.

A name or title in a planning document may prompt a question about authority, but it does not answer that question for a particular proposed gift. Rather than assume what someone can do, ask which document or professional can clarify the person’s authority in the circumstances. Separately ask who should address any federal gift-tax reporting question.

Keep reporting and tax due as separate questions

Gift-tax reporting and whether tax is payable are distinct questions. The answers depend on the gift and the applicable rules, so learning that a reporting question exists does not, by itself, establish whether tax is owed. The relevant facts about the transfer matter.

For each completed or proposed gift, note what you want to find out: whether it raises a reporting question, whether tax may be payable, or both. Treat these as questions for professional guidance rather than deciding from a general summary. The IRS directs people with unresolved gift-tax questions to a tax practitioner.

Prepare a transfer history for discussion

A clear record can make a planning conversation more focused. This is an optional way to organize information, not a determination that any transfer must be reported or that tax is due. Include both completed transfers and gifts you are considering, and label them separately so a proposed gift is not confused with a past one.

• For each transfer, record the donor, recipient, what was transferred, and when, to the best of your knowledge.
• Mark details that are uncertain rather than filling them in by assumption.
• Gather records you already have that relate to the transfers, and note who discussed or arranged each one.
• Write down any estate-planning document or named person that raises an authority question, along with the specific question you want answered.

Coordinate estate planning with tax questions

Use your list to separate the planning conversation into two tracks. One is how a proposed gift fits with your estate-planning documents and intentions. The other is whether the transfer raises a federal reporting question or whether tax may be payable. Keeping those issues distinct helps you direct each question to an appropriate professional without treating estate-plan coordination as a tax determination.

If someone named in a document may be involved in a proposed transfer, frame the point as something to clarify: What authority does that person have for this particular action, and who should address any gift-tax reporting? The documents and relevant facts should guide that discussion; a person’s title alone is not a substitute for clarifying the question.

Discuss your plan from Portola

Codi M. Dada Law Office P.C. has one in-person office at 802 Grant Ave, Novato, California, and provides virtual services throughout California. For a planning discussion from Portola, you can organize your proposed and past transfers, identify how they relate to your estate plan, and note any reporting or authority questions that remain open.

A useful next step is to bring your transfer list and the questions you could not resolve to the appropriate professionals. The IRS directs people with unresolved gift-tax questions to a tax practitioner. A planning conversation about how gifts relate to estate documents is a separate part of considering your overall plan.