Gift Tax Report or No?

[Unregistered]

OK. A lady has a retained interest in her home. She has gifted this to her daughter who does not live in the home. Deed has been changed at the courthouse. Attorney has done this for some estate planning.

I am questioning whether or not a gift tax should be filed. I don't think this gift has been completed. It won't actually be complete until the lady dies. However, some have said that it is complete because the lady cannot encumber the property. But the daughter could?

I see this as a life estate. So since it would be included in the estate at the ladies death, is it a gift now?

[Bees Knees]

What you describe is the creation of a joint tenancy.

TTB, page 21-19 under Joint Tenancies: "The creation of a joint tenancy is a completed gift for some assets. For other assets, the gift is not complete until assets are withdrawn by the donee without obligation to account for the proceeds to the donor..."

It then lists joint tenancies that are completed gifts. Real property (such as a house) is a completed gift. Bank accounts are examples of joint tenancy that is not a completed gift until the person actually spends the money.

It then goes on to explain that joint tenancy completed gifts at the death of the original owner become an inheritance. Any gift that was reported on Form 709 becomes an adjustment for the 706. Life estates and remainder interests are given the same treatment.

[WhiteOleander]

Thanks,
I hadn't read the section on the Joint Tenancy. But, that does help.