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Birch Douglass, IIILifetime gifts must be adequately disclosed on gift tax returns to preclude the Internal Revenue Service from adjusting the value of gifts for either gift tax or estate tax purposes. free tax preparation software Free tax preparation software. Similar disclosure rules apply to other transactions (for example, the sale of stock in the family business to a child) in order to bar the Internal Revenue Service from treating the transaction as a gift. The applicable Internal Revenue Code section is 6501(c)(9), and the regulations under that section apply to all gift tax returns filed after December 3, 1999 and are summarized below. Basic Rule. free tax preparation software Free online income tax filing. A gift is adequately disclosed if it is reported in a manner adequate to apprise the Internal Revenue Service of the nature of the gift and the basis for the value reported. Complying with the safe harbor can satisfy this requirement. Safe Harbor. free tax preparation software Pa taxes. Adequate disclosure is assured if the gift tax return contains all of the required information listed in the regulations. Failure to comply with the safe harbor rule means the donor must rely on the basic rule. Safe Harbor Required Information. To take advantage of the safe harbor, the following information must be provided in the gift tax return or in a statement attached to the return:A description of the property given by the donor to the donee. A description of any consideration received by the donor (for example, if a parent sells a parcel of real estate to a child for its cost basis rather than its fair market value). The identity of the donor and the donee. The relationship between the donor and the donee. If the gift is in trust, the trust''s tax identification number and a copy of the trust agreement (or brief description of the terms of the trust) A qualified appraisal or detailed description of the method used to determine the fair market value of the property given to the donee. Any position taken that is contrary to any proposed, temporary, or final Treasury regulations or revenue rulings published at the time of the gift. Qualified Appraisal. To satisfy the safe harbor valuation requirement by using an appraisal, the appraisal must contain:The appraiser''s qualifications to make appraisals of the type of property involved, the date on which the property was appraised, and the purpose of the appraisal.
Free tax preparation software
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