$13,000 gift

[JohnR]

If a parent doesn't make a gift while alive in 2013 can their eastate make the $13000.00? Does it need to be listed in the trust that a gift can be made?
Thanks

[Gary2]

If a parent doesn't make a gift while alive in 2013 can their eastate make the $13000.00? Does it need to be listed in the trust that a gift can be made?

An estate can make a gift if it's in the will. A trust can make a gift if it's in the trust documents. The trust and the estate are not identical, even if the trust elects to file a single return with the estate.

But are you really asking about the $13K exclusion from gift tax?

[John of PA]

Which is now 14,000. Short answer is no.

[Burke]

John of Pa is correct. From the wording in the OP, it appears the "gift" you are discussing is to a person, with the intention of excluding the income from the deceased taxpayer's estate. Once a person dies, that ability goes away. Usually estates and trusts (if it is specifically written in those documents) make "gifts" to charitable organizations, and there are special rules as to how they are treated. In the will, monies designated to go to a person would be considered a bequest to a beneficiary. In a trust, it would be a distribution to a beneficiary.

[Kram BergGold]

Burke

If the goverening document says I give $20,000 to my nephew and this is all he gets, then he is not a benificiary. I forget what he is called and this does not show up as a distribution which would pull income to a K-1.

[Roberts]

If a parent doesn't make a gift while alive in 2013 can their eastate make the $13000.00? Does it need to be listed in the trust that a gift can be made?
Thanks

Technically a legal question, not a tax question.
I'd say it is pretty irrelevant if the goal is tax avoidance. Gifts are part of the lifetime estate exemption. If they give someone $14k, it's going to technically reduce their estate exemption by that amount. The $14k figure is what is required to be reported to the IRS - not whether it is taxable or not.

[Burke]

If the goverening document says I give $20,000 to my nephew and this is all he gets, then he is not a benificiary. I forget what he is called and this does not show up as a distribution which would pull income to a K-1.

In this case, the money is designated as a specific bequest in legal terms. But the nephew is indeed called a beneficiary of that bequest, as would be a charity. Sometimes the term "devise" or "devisee" is used for real property. And another term is legatee. But you are correct in that those specific bequests are not considered distributions of the remainder estate used to calculate the DNI on page 2, and which flows to the heirs on the K-1's.

[mactoolsix]

In this case, the money is designated as a specific bequest in legal terms. But the nephew is indeed called a beneficiary of that bequest, as would be a charity. Sometimes the term "devise" or "devisee" is used for real property. And another term is legatee. But you are correct in that those specific bequests are not considered distributions of the remainder estate used to calculate the DNI on page 2, which flows to the K-1's.

Okay - I've gotta ask - Where do you guys learn all this stuff. I read every tax publication, article and book I can find, but I never understand Trusts, Estates, Wills, on and on. Our office does lots of estates, 1041's CRTS and once in while I'll "review" the number inputs for them, but I never fully understand them. My boss tells to hang around for another 40 years and I'll have it down pat - but by then I'll be pushing up daises!

Someone recommend a starting place . . . .

Thanks,
Mike

[Burke]

Probably the best place to start is with seminars provided by tax organizations of which you may be a member. You cannot beat the live sessions you actually attend in person with other tax preparers. NATP has them, I am sure NAEA does, NAEPC, also workshops at state and national conferences within these organizations. I know our state chapter of NATP has had several, and all of these usually have good reference materials with extensive reference information in completing the 1041, the 706. Also, since I also do estate and trust accountings for my clients, I have a lot of information relating to the Administration of Wills and Estates (and trusts) in Virginia. Each state has their own law governing estates and trusts and their taxation codified, as well as the federal tax code does, and those can be downloaded. The local commissioners have their own instructions which they give to executors and can answer questions. I know mine on a first-name basis (at least all of his office staff who review and approve these and file them at the courthouse). Many estate attorneys have estate planning seminars, & they always include any tax law updates -- both federal and state --and give you written materials to keep. They are usually free, as they are hoping to attract clients. I go to at least one of these once a year in another city, and I am on their mailing list. This firm specializes in wills and estates; in fact, it is just about all they do, and they just merged with a national firm. Nearly all these educational sessions qualify for CE credits either for the IRS, CPA & EA designations, etc. Then there are publications by estate attorneys.

[Burke]

.
Gifts are part of the lifetime estate exemption. If they give someone $14k, it's going to technically reduce their estate exemption by that amount. The $14k figure is what is required to be reported to the IRS - not whether it is taxable or not.

Not exactly. Gifts which exceed $14K per year, per person are part of the lifetime estate exemption and a return should be filed. If the yearly gift is kept at or below that amount, it is excluded entirely and it is not applied to reduce the lifetime exemption. No return need be filed.

[mactoolsix]

Probably the best place to start is with seminars provided by tax organizations of which you may be a member. You cannot beat the ones you actually attend in person with other tax preparers. NATP has them, I am sure NAEA does, NAEPC, also workshops at state and national conferences within these organizations. I know our state chapter of NATP has had several, and all of these usually have good reference materials with extensive reference information in completing the 1041, the 706. Also, since I also do estate and trust accountings for my clients, I have a lot of information relating to the Administration of Wills and Estates (and trusts) in Virginia. Each state has their own law governing estates and trusts and their taxation codified, as well as the federal tax code does, and those can be downloaded. The local commissioners have their own instructions which they give to executors and can answer questions. I know mine on a first-name basis (at least all of his office staff who review and approve these and file them at the courthouse). Many estate attorneys have estate planning seminars, & they always include any tax law updates -- both federal and state --and give you written materials to keep. They are usually free, as they are hoping to attract clients. I go to at least one of these once a year in another city, and I am on their mailing list. This firm specializes in wills and estates; in fact, it is just about all they do, and they just merged with a national firm. Nearly all these educational sessions qualify for CE credits either for the IRS, CPA & EA designations, etc. Then there are publications by estate attorneys.

Thanks Burke - I really appreciate all your input and suggestions,
Mike