Chapter 5 Study Guide

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Grandmother Jones contributed $2,500,000 to a revocable trust. She has a life expectancy of 24 years and she will receive an 8% per year annuity from the trust. At her death, the corpus will be paid to her granddaughter, Lisa. What is Grandmother Jones's taxable gift?

$0 Because Grandmother Jones reserves the right to revoke the trust, she has not made a completed transfer to Lisa and thus she does not have a taxable gift.

In the current year, Jerry loaned his daughter, Charisse, $15,000 to purchase a new car. The loan was payable on demand, but there was no stated interest rate. The applicable federal rate for the current year was 10%, and Charisse had $900 of net investment income for the year. For gift tax purposes with regards to this loan, how much has Jerry gifted Charisse during the current year?

$0 The loan is less than $100K and Charisse has less than $1,000 in net investment income so Jerry does not have to impute any interest and therefore has not made a gift.

Celeste and Raymond have been married for 29 years. Last year, Raymond sold his extremely successful automotive repair shop and his net worth now exceeds $10 million dollars. Celeste and Raymond have twin daughters, Kelly and Shelly, who will be 35 next month. Celeste and Raymond, neither of whom have given any gifts in the past, would like to give their daughters the maximum amount of cash possible without paying any gift tax. How much can Celeste and Raymond give to Kelly and Shelly during 2016?

$10,956,000

After reading an estate planning article in a popular magazine, Vaughn has decided to take action to reduce his gross estate by making annual gifts to his 4 kids, 8 grandchildren, and 4 great-grandchildren. Vaughn has discussed the gifting strategy with his wife, Rebecca, and provided it does not result in use of any of her applicable gift tax credit, she has agreed to split each gift. Vaughn does not want to use his applicable gift tax credit either. If Vaughn carries the plan out for 5 years, how much can he gift in total while meeting Rebecca's requirement? Assume the 2016 exclusion amounts.

$2,240,000

Jack gave his nephew, Stephen, 1,000 shares of ABC Corporation. Jack had an adjusted basis of $10,000 for all 1,000 shares and the fair market value at the date of the gift was $45,000. Jack paid gift tax of $9,000 on the gift to Stephen. If Stephen sells the stock three days after receiving the gift for $46,000, what is his capital gain/loss? (Assume Jack had already made transfers to Stephen during the year to utilize the annual exclusion.)

$29,000 gain

Timothy made the following transfers to his only daughter during the year: 1)A bond portfolio with an adjusted basis of $130,000 and a fair market value of $140,000. 2)2,000 shares of RCM Corporation stock with an adjusted basis of $126,000 and a fair market value of $343,000. 3)An automobile with an adjusted basis of $15,000 and a fair market value of $9,000. 4)An interest-free loan of $2,000 for a personal computer on January 1st. The applicable federal rate for the tax year was 8%. What is the value of Timothy's gross gifts for this year?

$492,000 The total of gross gifts is the fair market value of all gifted property before any deductions for gift-splitting, the marital deduction, or the annual exclusion. Because the loan in statement 4 is less than $10,000, it meets one of the exceptions of the imputed interest rules. The fact that the basis in Statement 3 is higher than the FMV is ignored for purposes of calculating the total gross gifts. The double-basis rule will apply to the donee in a subsequent sale. $140,000 + 343,000 + 9,000 = $492,000.

Donna and Daniel have lived in Louisiana their entire marriage. Currently, their combined net worth is $4,000,000 and all of their assets are community property. After meeting with their financial advisor, Donna and Daniel begin a plan of lifetime gifting to reduce their gross estates. During 2016, they made the following cash gifts: Son: $80,000 Daughter: $160,000 Republican National Committee: $75,000 Granddaughter: $15,000 What is the amount of the taxable gifts to be reported by Donna?

$92,000

Elements of a Gift

(1) Donor must have intent to make a voluntary transfer (2) Donor must be competent to make the gift (3) Donee must be capable of receiving the gift. (4) Donee must take delivery (5) Donee must actually part with dominion and control over gifted property.

Parties of a gift

(1)Donor-Person who makes the gift (2) Donee- Person who receives the gift

Donative Intent

-Donor had conscious desire to make a gift to the donee. The element differentiates from transfers received in return for consideration. -Court determines transfer as a gift is whether the transfer was made out of "Detached and disinterested generosity".

When the Lifetime annual exclusion per person goes down,dropped to $5,000,000 in 2026?

-Instead of waiting till I die, maybe gift some assets to my trust to get the hell out of my estate. (In case Lifetime annual exclusion goes down) -lets move some assets and gift them when I'm alive such as to a irrevocable trust. ---Can get income off trust but no control on trust since irrevocable ---$60,000/ Month forever on clients account - $10,000/month on spending on kid = $50,0000 so 50/50 is 5%. ---How long will it take to blow over $11.4 million which will easily blow over estate. So estate planning must be helpful in case Lifetime exclusion goes down over the years. Rich People are clever of tackling down the estate tax rate/Tax bills.

Reversionary interests

-Interests in property that have been transferred away and subsequently revert back to the grantor. -Has both gift and estate tax consequences. -The value of the reversionary interest is determined using statutory tables found in the Treasury Regulations Example: "Here - have my cottage until you die then I'll take it back." The value of the gift to the donee is not the fair market value of the property, rather, it is the present value of the right to use the property. The gift is how much is the use of your asset (Renting) and it not very common.

Incomplete transfers (No Annual Exclusion/not gifts)

-Naming an individual as a revocable beneficiary of an account, or making transfer to a revocable trusts. -Not considered to be gifts for gift tax purposes. Since incomplete gifts allow the donor to direct ultimate disposition of the property, the donor has not released control of the property, and dominion and control over the property has not been transferred to the donee. are gifts that have not yet come to fruition. -They are not taxable gifts for gift tax purposes. Example: Joint bank accounts where the donee has not made a withdrawal or transferring property to a revocable trust.

Revocable Trust

-Orderly process to your estate, have not given anything away when alive -Used to just organizing estate and not given away

Irrevocable Trust

-When you die, your assets are gone and have made a Gift. Can't be undone so permanent.

1)If Person died with $11.4 Million of taxable Estate? 2) If Person died with $21.4 Million of taxable Estate?

1) Estate Tax bill is $0. 2) Since the Taxable estate is $11.4 million. Estate Tax bill is $4 Million from 10% ($21,400,000)

Competence to make a gift implies that the donor:

1) Has attained the legal age of majority 2) Has mental capacity to make the gift 3) Owns, or possesses a general or limited power of appointment over, the property that is the subject of the gift.

To determine holding period of long/short term capital gains along with adjusted basis,

1) If gains basis is used, holding period of donor is included with holding period of Donee 2) If loss basis is used, holding period of the donee begins at the date of the gift.

Basic Strategies for transferring wealth through gifts

1) Make optimal use of qualified transfers (529s) (pay tuition for kids from private schools through professional education) 2) Pay medical costs for kids and heirs to provider institutions. 3) Make optimal use of the $15,0000 annual gift exclusion ($30,000 if the gift is made jointly with the spouse). 4) A spouse may make unlimited gifts to their spouse who is a U.S Citizen. 5) Steps 1-3 above are completely exhausted, transferor can begin using their lifetime applicable gift tax credit equivalency amount ($11,180,000) While still paying no gift tax until summation of lifetime taxable gift exceeds applicable exclusion amount. 6) Any gift tax paid on gifts prior to three years of death will also reduce estate of the transferor.

Steps in Calculation of Gift Tax

1) Sum total gifts for calendar year 2) Subtract Total exclusions and deductions (Annual Exclusions, marital deductions, charitable deductions) 3) Add Donor's taxable gifts for the calendar year (Total Gifts Less Exclusions and deductions) to the donor's previous taxable gifts for all prior calendar years. 4) Calculate gift tax on total gifts (Current and prior year) based on estate and gift tax rate schedule. 5) Calculate gift tax on prior year gifts based on estate and gift tax rate schedule. 6) Reduce gift tax on total gifts by gift tax on prior gifts. 7) Reduce net gift tax by remaining applicable credit. -Amount = Applicable credit for the current year is $4,417,800 which is also the applicable credit against tax allowable for all prior periods. 8) Net of the gift tax less remaining applicable credit is the amount of gift tax that must be paid in current year. There is no gift tax liability until donor makes cumulative taxable gifts > $11,180,000

Crystal loans Holly $650,000 so that Holly can buy a home. Holly signs a note, with a term of 5 years, promising to repay the loan. The home is the collateral, but because Crystal and Holly have been friends since childhood, Crystal does not charge Holly interest. Which of the following statements is true? 1. The imputed interest is considered a taxable gift from Crystal to Holly. 2. The imputed interest is taxable income on Crystal's income tax return. 3. The imputed interest is an interest expense deduction for Crystal. 4. Holly can deduct the imputed interest on her income tax return.

1, 2, and 4 The loan is greater than $100,000 and does not meet any of the exceptions to imputing interest. Crystal will have imputed interest income based on the applicable federal rate and the imputed interest will also be considered a taxable gift to Holly. Because the loan is secured by Holly's personal residence, Holly will also have an itemized deduction equal to the imputed interest. Crystal does not have an interest expense.

Direct Gifts

A direct payment of cash or transfer of property from one person to another. Control of the property is transferred to the donee, and the donor does not retain any control over the property after transfer. "Please, take my El Camino as a sign of my love!"

Complete transfers (THEY HAPPENED and given CONTROL)

A gift is complete when the donor releases control over the asset to a donee who can be identified at the gift of the date. The donor has released all control over the asset and the donee can be identified EX: The El Camino and mortgage payoff examples are both COMPLETE gifts

Crummey Provision ex: Harry and Wendy transfer $90,000 to an irrevocable trust naming their three children Adam, Billy, and Christopher as the beneficiaries. The trust provisions include a right to withdraw an amount equal to one-third of any contribution for 30 days for each beneficiary up to the annual exclusion limit for the 2 spouses ($28,000 for 2014, 2015, 2016 & 2017 and $30,000 for 2018). What are the effects?

After 30 days, Adam has lapsed the power to withdraw $30,000. Adam has made a gift of one-third of $30,000 to each of Adam, Billy, and Christopher. The gift to himself is no problem, but the gift of one-third of $28,000 ($10,000) to each of Billy and Christopher violates the 5/5 Lapse Rule (5% of $30,000 assets = $1,500 and $5,000 whichever is higher) and has therefore made a taxable gift of $8,500 ($10,000 - $1,500) to each of Billy and Christopher. When presumably, Billy and Christopher also lapse, they likewise have made taxable gifts which are gifts of a future interest and therefore do not qualify for the annual exclusion.

Annual Exclusion

All individuals may gift up to $15,000 (2018) tax free per donee each year (adjusted for inflation)...and it is PERISHABLE, meaning that once the year is over, that's it. You cannot carry over unused annual exclusions. --Gov't says spread the wealth, otherwise you must file gift tax return. Gift must be a present interest -if future interest normally does not qualify for annual exclusions, then it will be reported as taxable gift, Deminimis rule set by congress to help reduce reporting requirements for small gifts. Citizen spouses have unlimited deductions for gifts -Each person has $11, 180,000 lifetime applicable gift tax exclusion

Turning a Future Interest Gift into a Present Interest Gift: Crummey Provision (1 of 3)

Allows the trust beneficiary to withdraw some or all of any contribution to a trust for a limited period to create a gift of a present interest Does two things (1) qualifies the transfer as a present interest and (2) creates a general power of appointment for estate tax purposes. Typically limits withdrawal right to amount equal to annual exclusion or less, converting what might have been a gift of a future interest to a gift of present interest, which will then qualify for annual exclusion.

Carl would like to make a gift to his son, but does not want the value of the gift and the associated gift tax to total an amount greater than $100,000. Carl's cousin has told him about the net gift, but Carl has come to you for clarification. Which of the following statements from Carl's cousin is correct?

Carl will have taxable income to the extent the gift tax paid is greater than his adjusted basis in the gifted property

When loss property gifted, and sold by donee at price less than donor's basis

Difference between donor's basis and sale price will near be recovered in form of a capital loss.

Split Gifts of Community and Joint Property

Do not require gift splitting in Community Property since each spouse is deemed to own one share of any community property. Any gift of community property is a joint gift not subject to gift splitting, Gift splitting was enacted as a way to equalize to import of gift tax rules in community and non-community property states.

Applicable Exclusion Amount

Each person also has one lifetime credit equivalency amount up to $5,490,000 for 2017 and $11,180,000 for 2018. The $11,180,000 equals a credit against tax of $4,417,800 (2018)

Brent and his wife live in a common law (separate property) state. Each year, Brent makes gifts equal to the annual exclusion to his three children. During the year, he comes to you looking for a way to transfer more than $75,000 each year to his kids without using his applicable gift tax credit or paying any gift tax. All of the following statements regarding gift-splitting, are true, except:

Even if Brent's wife elected to split gifts, only Brent's gifts would be split

Who Must File Form 709?

Everyone who makes a gift unless gifts are: -Under the annual exclusion -Qualified transfers -Transfers to spouses (generally) -Transfers to charities Remember - if gifts are split between spouses there must be a tax return even if less than the annual exclusion (does not apply to community property because there are no split gifts in community property)

Payments for legal support are not gifts

Exempt from gift tax rules. Support obligations take many forms and legal support do not necessarily stop at age 18 (depends on state law)

Valuation of a Gift

FMV at the date of the gift -Real estate - need appraisal -Publicly traded securities are valued at the high and low trading price for the day --Amazon Stock is the value on the gift the day you gave them. -Bonds -Present value of the expected future payments --PV along with Interest added -Discounts may be allowed for lack of marketability, lack of liquidity, and lack of control.

Which of the following is eligible for the annual exclusion?

Frank funds an irrevocable life insurance trust with the amount necessary to pay the premiums of the policy. The beneficiaries can take a distribution equal to the contribution each year. If the beneficiaries of a trust are given the right to take a withdrawal during the year, the contribution is eligible for the annual exclusion.

Require a gift tax return (Form 709) for SPLIT GIFTS

Getting out of a community property state results in this requiring a gift tax return With spouse agreeing to give the gift amount. If no taxable gift is made during year (because all gifts are under the annual exclusion due to gift splitting), only the donor who actually gifts property is required to file a gift tax return

Transfers to Political Organizations

Gifts made to political organizations are exempt from gift tax

Payments to 529 Plans

INSANE and should not be overlooked as a strategy Example: YOU own the 529 and your KID is the beneficiary You control the money and you can change the beneficiary at any time, but -Contributions are a considered a PRESENT INTEREST GIFT -The Internal Revenue Code allows you to contribute FIVE TIMES the annual exclusion amount in a single year and avoid gift tax -The assets in the plan are not part of your gross estate with the exception of accelerated gifts (if you die before excess gifts have been allocated the unallocated gifts will be part of your gross estate)

Unified Credit ($4,505,800)

If estate $11,400,000, Every dime over that amount is taxed at 40%. Taxes are progressive to amount in estate planning. Lifetime exemption is applied to the unified tax credit of $4,505,800.

2nd Exception - When gift tax is paid on appreciated property (Income Tax issues related to gifts)

If gift tax is paid, then the basis will increase by the pro rata share of the gift tax paid on the appreciation Formulas are Donor's Adjusted Basis + ((Appreciation/FMV) x Gift Tax paid) = Donee's adjusted basis Donor's adjusted basis + ((Appreciation/FMV-Annual Exclusion) x Gift Tax Paid) = Donee's adjusted basis.

Advantages of Lifetime Gifts vs. Bequests

In yellow, Bequests at Death effect on Gross Estate are "Not Applicable" Transfer: Cash used to pay estate taxes -Gifts and Lifetimes transfers effect on Gross Estate: N/A -Bequests at Death Effect on Gross Estate: Included in Gross Estate

Indirect gifts

Indirect transfer on behalf of a donor for the benefit of a donee. -Makes a payment for someone else (Paying off Someone else's mortgage) -Titles property in joint tenancy with another and other person has not paid for their ownership share. -Below market loans ~ Amount the lender imputes is a gift. EX -Paying off someone's debt -Titling an asset in joint tenancy when that person has not paid for any or all of their share -Making a below-market-interest loan (special tax treatment)

Future Interest Gift

Interest that is limited in some way to a future date or time Donee's right to the property is contingent upon some future date or time. Example: Remainder beneficiary of a trust A gift of future interest does not qualify for the annual exclusion.

Consideration

Is the value of property transferred in return for other property. A gift arises whenever an exchange of property occurs and one of the parties does not receive full and fair consideration for their property or services. One of the parties could have made a poor economic deal, but in evaluating suspect transactions, it is always prudent to look closely at the relationship of the parties to determine if there was any donative intent/lack of consideration.

While completing Joelle's tax returns, Joelle's CPA asked her if she made any gifts during the year. Joelle faxed her the following information. Of the following, which would not require the filing of a gift tax return?

Joelle gave her husband one-half of an inheritance she received from her uncle. The inheritance was $3,000,000.

Split Gifts

Married spouses can elect to split gifts effectively doubling the annual exclusion per donee to $30,000 (2018) -As long as the other person agrees to use your annual exclusion. When one donor makes the gift and the donor's spouse consents to use their annual exclusion for that donee, then the gift is called a split gift. Must be elected for all gifts made by both spouses while married for that year Only count for the time during which a couple was married No gift-splitting for joint property and for community property (no returns needed)

Gift Strategy: Gifts to Minors

May need trusts or custodial accounts. Custodian is permitted to spend money on behalf of the minor and serves without posting a bond and normally without the need to file accounting with the probate court. Permissible gifts include cash, securities, life insurance, and annuities.

Donor (person who makes a gift)

Must be competent to make the gift Must have intent to make a voluntary transfer; otherwise it is Theft

Donee (person who receives a gift)

Must be competent to receive the gift Must take delivery -Big Estate and a kid who don't trust, gave an asset to the kid by titling his name but with limitations (Kid doesn't have full control) to avoid shedding assets Must accept the property

Form 709 (Gift Tax Return)

Must be filed by APRIL 15 of the year following the gift. -Filing date can be extended simply by extending donor's income tax return, but similar to income tax; time to pay is not extended and penalties will apply. Donor is primarily liable for gift tax but donee can become responsible if donor does not pay.

Unlimited marital transfers

My estate is worth $15,000,000, I could transfer whole estate value to my husband and not a taxable event. --If husband dies suddenly the next day, he dies with $30,000,000. -Not using lifetime exemption is a WASTE because your are not taking advantage of the $11,400,000 in proper estate planning.

Multi-Party Strategies

Never gift property in a loss position...sell it instead Gift property with the greatest appreciation potential to the youngest donee Gift appreciated property to charities to avoid the capital gain taxes Gift income-producing property to the donee in the lowest marginal income tax bracket so that the income is subject to the lowest possible income tax Note that in diagram, this assumes the "oldest person" is in a low marginal income tax bracket

Stephanie received 100 shares of ZYX Corporation from her aunt with an adjusted basis of $60,000 and a fair market value of $30,000 as of the date of the gift. Her Aunt paid $1,500 of gift tax. Stephanie sold the stock for $45,000. What is Stephanie's recognized gain or loss?

No gain or loss

Qualified Gift (Nobody really cares to file it, no need to file it)

No need to file paperwork if you make the payment check payable directly and filed/gone to the Organization (School and hospital). ex: Max has $20,000 given and was for school or hospital

Gift Strategy: Gifts to Spouses

Often used to equalize the estates

Deborah provides the following list to her CPA who is preparing her gift tax return. Which of the following will Deborah's CPA include as a taxable gift on Deborah's gift tax return?

Payment to grandmother of $20,000 to help with her medical bills

Pedro has begun a program of lifetime gifting. All of the following statements regarding lifetime gifts are true, except:

Payments directly to his grandchildren for their education over the annual exclusion amount will not be taxable Only this one if false - Payments to his grandchildren will be taxable because they were not made directly to the institution and thus are not qualified transfers

Payments to Divorcing Spouses

Payments pursuant to a divorce decree are nontaxable property settlements and therefore not gift.

Transfers that lack donative intent include

Quic-pro-quo transfers, transfers occasioned by lost or stolen property, and transfers resulting in a poor economic arrangement for one or both parties.

Randy transferred property with a fair market value of $56,000 to his brother, Robbie. Randy's adjusted basis in the property was $23,000. Of the following statements related to this transfer, which is correct

Randy has a taxable gift to Robbie of $42,000

Single Party Strategies (if the goal is GROSS ESTATE REDUCTION)

Rarely wise to gift cash The donor should prepare a current balance sheet with a forecast of what is likely to appreciate the most Transfer the asset likely to appreciate the most -This will remove highly appreciating assets from the donor's gross estate and the appreciation will occur in the hands of the donee Unless the donor is very close to death, such a strategy should generally be superior to receiving a step up in basis for transfers at death

Gift Strategy: Gifts of Appreciating Property

Reduces future gross estate by gifting properties at high appreciation value like business interests, real estate, art or other collections, investment securities, other intangible rights.

Present vs. Future Interest

Remainder Trust is a future interest. Over $15,000 requires paperwork. If over $11,400,000, you owe gift tax on estate tax bill. The only gift that did not get the annual exclusions is Mikayla Present interest due to being in trust.

Non-U.S. citizen spouses annual exclusion

Super Annual Exclusion" = $152,000 (2018)

5/5 Lapse Rule

Taxable gift occurs when the power to withdraw in excess of $5,000 or 5% of the trust assets is lapsed by the powerholder -Must be applied to determine if lapse cause beneficiary holding crummy power to make taxable gift from beneficiary holding crummy power to the other beneficiaries of trust. Only comes into play when >1 beneficiary

Receiving a gift?

The Donee must be identifiable at the time of the gift. -The Donee must take delivery of the gift, requiring the donor to relinquish dominion and control over the property.

A completed gift does not occur until noncontributing party withdraws money for his or her own benefit with the reasoning of:

The contributing party could have withdrawn all of the money at any time prior to a withdrawal by the noncontributing party. A gift does not occur upon creation of the joint account nor upon notification that the joint account has been created. Gift occurs only upon a withdrawal by the noncontributing party for his or her own benefit.

Summary of Imputed Interest on Gift and Below Market Loans

The downside is the person who gives(makes) the loan, Be prepared that Imputed interest come back to you in case of loaning over $10,000 up to $100,000. The downside is the person who gives(makes) the loan, Be prepared that Imputed interest come back to you in case of loaning over $10,000 up to $100,000.

Statute of Limitations for Form 709s

The statute of limitations for the IRS to assess any additional gift tax is generally 3 years from filing (due date) unless it's not adequately disclosed -If the gift is not adequately disclosed, statute of limitations will never expire. No time limitation if failure to file or fraud. It is important to file a gift tax return where a valuation discount (e.g., a minority interest stock) may be subject to reasonable differences of opinion.

Charitable Gifts

There is an unlimited gift tax deduction for gifts made to qualified charities 1) Federal, State, or local gov't for public use 2) Section 501 (c)(3) Corporations operated exclusively for religious, charitable, scientific, literary, or education purposes 3) Section 501 (c) fraternal or veteran organizations.

Gifts to Spouses

There is an unlimited marital deduction allowance for transfers between married people without gift tax. The transferee spouse must be a U.S. citizen There are different rules for non-U.S. citizens -A citizen spouse may transfer $152,000 annually (2018) to other non-citizen spouse with no transfer tax consequences.

What is Consideration?

Transfer of property or payment in return for property If there was fair consideration, then it is not a gift

Gift Strategy: Achieving Client Goals with Direct Gifts

Transferring Can assure completion of the gift, see beneficial effect and joy gift brings to the donee and enjoy pleasure of making the gift. Effective and efficient.

Transfers in a Business Setting

Transfers in a business setting are presumed to be compensation and therefore not a gift. De minimis gifts are the exception to compensation and because of the size of their amount are generally not subject to gift tax.

Gifts of a Present Interest

Unrestricted right to the immediate use of the property. Gifts of cash, property, etc, where title passes immediately to donee are common examples of gifts of present interest.

Gift

Voluntary transfer, for less than full consideration, of transferring property from one person (donor) to another person or entity (Donee) Without full consideration -Gift element of being gifted at a discount price. -Maddie pays $10 for a house instead of paying full market value of the house.

1st Exception - YOU CANNOT GIFT A TAX LOSS (Income Tax issues related to gifts)

When the fair market value of the asset given is less than the donor's basis Dual basis and holding period -Basis for losses is FMV -Basis for Gains is the donor's adjusted basis (AB) -If sold for an amount between FMV and AB then there is no gain or loss Moral of the story - don't gift property that has a loss

Qualified Transfers

payment made for someone else paid directly to a: -Qualified educational institution for tuition, or -Medical care provider for qualifying medical expenses The key is that it must be paid directly to the institution not to the person does not count against the annual exclusion or applicable lifetime exclusion amounts -Individual can provide assistance for other individuals without worrying about transfer taxes. -Can be used to minimize overall transfer tax with family.

If the transferor renounces his retained or revisionary interest or a trust becomes irrevocable,

transfer would become a completed gift for gift tax purposes.

If donor gives away property with a loss,

would have been better selling property, taking capital loss against taxable income, getting cash proceeds from sale to donee.


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