Gift Tax

[gman]

I have a farmer that died suddenly in june of last year, leaving all equpment and land to only sister. The sister has no use for any of it and wants to pass it all to her children to continue farming. Equipment has a value of $150,000. 00 Can she gift them so much each year and avoid filing any returns on that or must a gift return be filed?

[taxea]

If she gives the equipment to the children now she has to claim the gift now. Why doesn't she just let them use of the equipment and keep it in her name. They are going to depreciate in value. If children have a business in which they will be using the equipment she could lease it to them and then give each a $13K gift each year?

[Hamacher]

Gifting

I have a farmer that died suddenly in june of last year, leaving all equpment and land to only sister. The sister has no use for any of it and wants to pass it all to her children to continue farming. Equipment has a value of $150,000. 00 Can she gift them so much each year and avoid filing any returns on that or must a gift return be filed?

She can gift them $13,000 each. If she is married she and her husband can each gift them $13,000. Anything over the annual gift tax exclusion would require a gift tax return.

[taxmandan]

She could disclaim the inheritance, but she would want to check if the assets would pass to her children in that event or are there other relatives in the picture who might then get them.

[Burke]

That is what I was going to suggest. Check your state laws on disclaimers. In my state, it must be done within 9 months of qualification. If this is done, it is as if she predeceased him, and in that event it may or may not pass to her children, depending on what other heirs may have been living at his death.

[gman]

No other heirs

She was the only sibling, and has absolutely no use for tractor and equipment. She is approxiametely 60 years old. What is the process to disclaim and let her two children have them?