8/3/2019 Transferring your home to the kids? You must let the IRS know, even if your estate is not currently taxable

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The unified gift andestate tax exemption foran individual is current-ly $5 million. Individualsmay pass that much, freeof estate tax and gift tax,during their lifetimes.

Under the current law,most of us dont have

taxable estates.But hold on. Just be-cause your estate is notcurrently taxable doesntmean it wont be when you passaway. You dont know when that willhappen. You dont know what yourasset situation will be at that point,either. And you surely dont know

what the tax code will be. The pres-ent estate tax law is due to expire atthe end of 2012. Its always beena political football, so anything ispossible.

Also, remember we are dealingwith the Unified Gift and Estate TaxExemption. Any gifts you make over$13,000 to any one individual in anyone year will be deducted from yourlifetime exemption. The IRS wants toknow about any such gifts, because

they could push your estate into tax-able territory. The IRS is not about tolet go of that potential revenue. Youare required to report any such gifton a Form 709, regardless of whetheryour estate is currently taxable. If youhavent used up your full lifetimeexemption, currently $5 million,filing the 709 is merely information-

al; neither you nor the recipient willowe tax on this gift.One of the transfers seniors often

make to adult children is real prop-erty. And according to the IRS, many

of them never file therequired 709. I knowof many cases wherethe parent just goesdown to the neigh-b o r h o o d a t t o r n e yand asks for a quit-claim deed. Generally,the attorney does as

asked, not discussingthe tax or estate plan-ning ramifications orthe 709 requirement.

According to a recent report inKiplingers, 60% to 90% of taxpayerswho transfer real property to familymembers for little or no considera-tion do not file the required Form

709. So the revenue-strapped feder-al government is now cracking down,examining land transfer records totrack these gifts, and auditing tax-payers who have not complied with

the 709 requirement.If you make a gift over

$13,000 to any one personwithin any given year, but

dont report it, you couldbe creating a big tax messfor your heirs. Consult with an exper-ienced estate planning attorney todetermine how to effectively makegifts. He or your CPA can also adviseyou about the steps you must take ifyouve already made such a gift butnot reported it.

Joseph S. Karp is a nationally certifiedand Florida Bar-certified elder law attorney(C.E.L.A.) specializing in the practice ofTrusts, Estates and Elder Law.

His offices are located at 2500 QuantumLakes Drive, Boynton Beach (561) 752-4550;

2875 PGA Blvd., Palm Beach Gardens(561) 625-1100; and 1100 SW St. Lucie W.Blvd., Port St. Lucie (772) 343-8411.

Toll-free from anywhere: 800-893-9911.

E-mail: KLF@Karplaw.com or websitewww.karplaw.com.

Read The Florida Elder Law and EstatePlanning Blog atwww.karplaw.blogspot.com.

Joseph S. Karp, C.E.L.A.

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Listen to Joe Karp and Anita Finleyon Saturday, August 20 from 7:30-8:00 AM

on WSBR 740AM and on the

Internet at www.wsbrradio.com.

Report Those Gifts