Gifts to siblings

[Possi]

My client inherited Dad's house. 

Dad told him to "do what you think is fair" by your siblings (3). 

Client will give 2 siblings $35k and one sibling $30k.

Two siblings are married. Client is married. 

I was planning to file a gift tax return for $100k, split as above. 

There won't be any taxes owed, I realize. 

But, might the gifts be considered given by each, my client and his wife,  to each of his siblings/spouses, and legally avoid the gift tax return? 

I don't mind doing the gift tax return and charging for it, but if it's not really necessary, I'd rather avoid it. 

[Lion EA]

If the checks are written in a way to keep each gift by each giver to each recipient under the limit ($15,000 for 2019?), then no gift tax return is necessary.

But, if your client is giving all the gifts, $35k and $35k and $30k, (or even $17.5k four times, etc.) and his wife is willing to gift split with him, then you need to file a gift tax return from each of them to report the agreed-upon splits.

[Possi]

I'm a little confused. Could the wife give $15 and the client give $15 to each recipient? 

My client's wife does not care what he does with it. 

[jklcpa]

57 minutes ago, Possi said:

I'm a little confused. Could the wife give $15 and the client give $15 to each recipient? 

My client's wife does not care what he does with it. 

Yes. Husband and wife can each give $15K to each party, and if the recipient is married, then it is possible for a married couple to give another married couple up to $60K in one year without any return required. Two separate checks from husband and two more from wife per recipient couple.

As another alternative if the client doesn't want to involve the recipients' spouses for those whose total gifts will exceed $30K, the donor and wife could each gift $15K this year and the remaining $5K in 2020 if all the parties are willing to wait a few more months.

[Possi]

1 hour ago, jklcpa said:

Yes. Husband and wife can each give $15K to each party, and if the recipient is married, then it is possible for a married couple to give another married couple up to $60K in one year without any return required. Two separate checks from husband and two more from wife per recipient couple.

As another alternative if the client doesn't want to involve the recipients' spouses for those whose total gifts will exceed $30K, the donor and wife could each gift $15K this year and the remaining $5K in 2020 if all the parties are willing to wait a few more months.

Thanks, that clears it up for me. 

 

[Gail in Virginia]

Just remind them it is for the whole calendar year - once they give them the cash they should, technically, be sure to skip any Christmas or birthday gifts since that will put them over the limit if they have already given the max. 

[Possi]

I talked to him about it, and I'm going to do the gift return after all. He doesn't want too many hands in it, and he'll pay me, no problem. This is a great client. We weren't trying to do anything untoward, it was all me trying to lighten my load. 

BUT, WHILE I HAVE Y'ALL HERE... I had posted somewhere else, and now I can't find it, that Dad put Jr's name on the deed just days before he died. The deed was filed after he died. This was done by the lawyer, of course. *cough*idiot*cough* 

Someone posted that in certain situations like this, where it's so close to the death, and the intent is inheritance, (where both apply), it can be treated as inherited, and not a gift. Client had a huge mess to clean up, and sold it to a friend at FMV (which was depressed because of the condition). And now, he will be gifting the siblings their shares.

I thought I documented that post, but can't find it to save my soul.

Can anyone direct me to that rule where he can treat it as inherited? 

[Evan S. Golar]

Wouldn't that be considered an incomplete gift?

[Possi]

3 hours ago, Evan S. Golar said:

Wouldn't that be considered an incomplete gift?

Well, maybe. Except that son was only added to the deed, not given full title until Dad died.