Gift Tax Planning for Los Altos Residents

Start with the documents behind the decision

Before deciding whether to change an estate plan or make a proposed gift, compare the records that show what you have already transferred with the documents that describe your current plan. This creates a clearer picture of how a new transfer may fit into your overall intentions.

Gather copies of relevant estate-planning documents and records of prior transfers, along with a description of the proposed gift. Note who would receive it, what would be transferred, and when you are considering making the transfer. These are practical preparation steps, not a statement that any particular document is legally required.

• Current estate-planning documents, such as a will or trust, if you have them.
• Records or a summary of previous transfers you want considered.
• A written description of each proposed gift and the questions you want answered.

Separate reporting from whether tax is payable

Federal gift-tax reporting and whether gift tax is payable are distinct questions. The answer depends on the gift and applicable rules, so the fact that a transfer may need to be considered for reporting does not by itself establish that tax is due.

The donor is generally responsible for federal gift tax. Because the reporting question is not the same as the tax-payment question, organize the facts of each transfer and discuss unresolved tax questions with a tax practitioner. Codi M. Dada Law Office P.C. does not promise tax savings or represent that it prepares tax returns.

Decide what to compare before changing the plan

Use the document review to identify the decision you are actually facing: whether to proceed with a proposed gift, whether estate-planning documents should be revisited, or whether a federal reporting question needs separate tax-practitioner input. These are related but different questions; resolving one does not automatically answer the others.

For example, if you are considering a transfer and your existing plan includes a trust, bring the trust document and a record of earlier transfers to the discussion. The useful comparison is how the contemplated transfer relates to the plan you have—not an assumption that a gift will produce a particular tax result or require a particular plan change.

• Which current estate-planning documents should be reviewed alongside the proposed gift?
• What records of prior transfers help explain the history and context?
• Is there an unresolved federal reporting or tax question to take to a tax practitioner?

A practical next step

Prepare a short inventory of proposed and previous transfers, then assemble the estate-planning documents you want considered. Keep questions about the effect of a transfer on your plan separate from questions about federal reporting or tax payable. If the tax rules leave a question unresolved, the IRS directs people to a tax practitioner.

Codi M. Dada Law Office P.C. serves clients virtually throughout California from its Novato office. A focused discussion can begin with the documents you already have and the decision you are considering.