Gift Tax Return Requirement

[DaveO]

If a parent sets up a revocable living trust for their adult child and funds it with $30,000, is a gift tax return required?

In a similar vien a parent has a non-qualified annuity worth $250,000. They do a tax free exchange for a new annuity in the adult childs name. Is a gift tax return required here?

[New York Enrolled Agent]

In a similar vien a parent has a non-qualified annuity worth $250,000. They do a tax free exchange for a new annuity in the adult childs name. Is a gift tax return required here?

Are you sure you can do a TAX FREE exchange in the situation you describe? IMO, the transfer of an annuity to a new owner would generally not qualify for a tax free exchange.

[DaveO]

That is my take on it as well. In the part sectiont form 706 in the TTB it states a gift of a future interest is always reportable. That would seem to cover both of these issues.

I'm trying to unravel some work done by a so called "financial advisor" who is throwing a fit becasue I won't accept their opinion about the taxability of their clients annuity. Of course they won't put together the numbers to dispute what is reported on the 1099R they just want to yell at me and tell me I don't know what I'm talking about.

The trust just appeared for the first time this year even though it was formed years ago. I'd guess it wasn't funded till recently. Still I can't see how you could avoid the gift tax return issue since the dollar amount is clearly over the limit. Estate tax may be an issue in this case.