Gift returns not filed

[LindaB]

Elderly widow wants to make a gift of some jewelry to her daughter and granddaughters. The issue of a gift tax return came up while she was discussing this with her son, who will be the executor of her estate. Evidently this elderly woman does not understand the need for a gift tax return, and as a result of further discussion it seems that she has given gifts in the past that should have been reported on gift tax returns, but were not. If she were to pass away this year there would be no estate tax (under the limits), and in 2010 estate tax is no more, but if the estate tax returns in 2011 under the old limits, her estate would be taxable. I believe that is when lifetime taxable gifts would be relevant.

I don't do gift or estate returns myself, so I hope I don't sound totally stupid about this, but my question is this: What would you do about gift tax returns that should have been filed in the past and were not?

[TAXBILLY]

First determine if gift tax returns are necessary. See:

http://www.irs.gov/pub/irs-pdf/p950.pdf

taxbilly

[LindaB]

First determine if gift tax returns are necessary. See:

http://www.irs.gov/pub/irs-pdf/p950.pdf

taxbilly

In one case the woman bought a house and gave it to her daughter, or rather the lawyer set it up so that she sold it for $1 to her daughter. The woman was married then, but even if she and her husband split the gift and gave it to the daughter and son-in-law, it would have been over the annual limit. In another case the woman had loaned money to her son to start a business, he made payments including interest, but later she forgave the remaining debt, which was over the annual limit. There may have been other gifts over the annual per person limit, but I doubt that the total gifts would go over the lifetime $1,000,000 exclusion.