Estates, Gifts & Trusts

Gifts (845 - 2nd)

 

Portfolio Description

Tax Management Portfolio, Gifts, No. 845-2nd, discusses the definition of "taxable gift" and analyzes when a transfer subject to the gift tax occurs. Donative intent on the part of the transferor is not required for the transfer to be a taxable gift; instead, an objective test of whether there was sufficient consideration for the transfer is determinative. In addition to direct gifts of property, transfers in trust, and transfers of real, personal, tangible, and intangible property, the gift tax attaches to indirect gifts such as the payment of another's expenses (except for certain tuition and medical expenses) and interest-free loans.

General principles are discussed relating to completed transfers, incomplete transfers, transfers involving married persons, and transfers of community property. Special problems can arise upon the exercise or lapse of certain powers of appointment and in connection with jointly held properties. Gift tax implications that the practitioner should consider before creating or exercising a power or creating or severing a joint-property relationship are discussed.

Principal portions of this Portfolio pertain to valuations, the special valuation rules under Chapter 14, transfers subject to liabilities, application of the §2503 exclusions, the distinction between present and future interests, gifts of life insurance, gifts to minors, the gift tax marital and charitable deductions, and computation of the gift tax.

Additional discussion of some of these topics may be found in 839 T.M., Estate and Gift Tax Charitable Deductions, and 846 T.M., Gifts to Minors.

This Portfolio may be cited as Lischer, 845-2nd T.M., Gifts.

Henry J. Lischer, Jr., University of Iowa, B.B.A. (1967), J.D. (1970); New York University, LL. M. (in Taxation) (1973); Judge Advocate, U.S. Marine Corps, 1970-73; Associate, Lillick, McHose & Charles, Los Angeles, California, 1974-75; Professor of Law, University of Alabama, 1975-78; Professor of Law, Southern Methodist University, 1978-present ; Counsel, Malouf Lynch Jackson & Swinson, Dallas, Texas, 1982-84, 1985-present; Professor-in-Residence, Office of Chief Counsel, Internal Revenue Service, Washington, D.C., 1984-85; Fellow, American College of Tax Counsel; Academic Fellow, American College of Trust and Estate Counsel.