Gift Tax Planning for Los Angeles Residents

Separate reporting from tax owed

Federal gift-tax reporting and whether gift tax is payable are distinct questions. The answer depends on the gift and applicable rules, so a reporting question should not be treated as proof that tax is due—or as proof that no return or other action is needed.

The donor is generally responsible for federal gift tax. If you are considering a transfer, identify who is making the gift and who is expected to handle any related reporting question. The IRS directs people with unresolved gift-tax questions to a tax practitioner.

Clarify who can act

Start with the person named in the estate-planning document and the role that document assigns. A person named to carry out a plan is not automatically authorized to make a new gift or take on every tax responsibility. Whether further authority is needed depends on the proposed action and the applicable rules.

For each transfer, distinguish the donor from anyone who may help administer the donor’s affairs. If someone other than the donor is expected to act, identify the document or other authority they believe permits it, then raise that question before proceeding. This helps keep responsibility for making a gift separate from questions about managing property or coordinating the estate plan.

Prepare a useful transfer summary

A concise record can help a tax practitioner assess reporting questions and help you consider how a proposed transfer fits your estate plan. It is a discussion aid, not a determination that a gift is reportable or taxable.

• List proposed gifts and prior transfers, including the date or expected timing, the recipient, and a plain-language description of what was transferred or is being considered.
• Note who made each transfer and whether anyone else is expected to take action on the donor’s behalf.
• Gather relevant estate-planning documents and any records that describe the transfers.
• Write down what you want to accomplish and any questions about reporting, responsibility, or the authority of a person named in a document.

Coordinate planning without assuming a tax result

Use the transfer summary to identify which questions concern estate-plan coordination and which require tax guidance. For example, you might ask how a proposed gift relates to your plan while separately asking a tax practitioner whether the transfer raises a federal reporting or tax question.

Do not rely on an estate-planning discussion alone to decide whether a federal gift-tax return is needed or whether tax is payable. Those are separate questions governed by the gift and applicable rules; a tax practitioner can address unresolved tax questions.

Discuss your plan with the firm

Codi M. Dada Law Office P.C. has one in-person office in Novato and provides virtual services throughout California, including Los Angeles. You can use a planning discussion to explain the gifts you are considering, how they relate to your estate plan, and who you expect to act. Bring your transfer summary and the documents relevant to that question so the discussion can focus on the next decision.