Generally, you’ll need to file a gift tax return if, during the tax year, you made gifts:
- That exceeded the $13,000-per-recipient gift tax annual exclusion (other than to your U.S. citizen spouse),
- That you wish to split with your spouse to take advantage of your combined $26,000 annual exclusions, or
- Of future interests — such as remainder interests in a trust — regardless of amount.
If you transferred hard-to-value property, consider filing a gift tax return even if you’re not required to. Adequate disclosure of the transfer in a return triggers the statute of limitations, preventing the IRS from challenging your valuation more than three years after you file.
There may be other instances where you’ll need to file a gift tax return — or where you won’t need to file one even though a gift exceeds your annual exclusion. Contact us for details.