Welcome Guest. Register Now!  



Reply
 
LinkBack Thread Tools Search this Thread Display Modes
  #1 (permalink)  
Old 08-04-2015, 10:13 AM
Member
 
Join Date: Jan 2014
Posts: 33
Gift tax return question

A Gift was made to a trust where there are 2 beneficiaries that are children of the donor and 3 beneficiaries that are grandchildren. One child has a 50% share of the trust, the other child a 40% share. The grandchildren have a total of 10% share. When reporting these gifts on form 709, does 90% of the gift amount get reported for only gift tax purposes and 10% of the gift amount get reported as a direct skip which is subject to both gift tax and generation skipping tax? Or does 1/5 of the gift amount get allocated to each beneficiary (since there are 5 beneficiaries) subject to gift tax or gift tax and generation skipping tax depending on the generation of the beneficiary?



Digg this Post!Add Post to del.icio.usBookmark Post in TechnoratiFurl this Post!Reddit! stumble!bookmark in google!Share on Facebook!
Reply With Quote
  #2 (permalink)  
Old 08-04-2015, 03:51 PM
Moderator
 
Join Date: Oct 2010
Posts: 4,835
A Gift was made to a trust where there are 2 beneficiaries that are children of the donor and 3 beneficiaries that are grandchildren. One child has a 50% share of the trust, the other child a 40% share. The grandchildren have a total of 10% share. When reporting these gifts on form 709, does 90% of the gift amount get reported for only gift tax purposes and 10% of the gift amount get reported as a direct skip which is subject to both gift tax and generation skipping tax? ======>I guess so.Pty that you give directly to your grandchild(ren) is subject o an immediate GST tax. In addition to any gift tax or estate tax if this tax is ALSO subject to.
Or does 1/5 of the gift amount get allocated to each beneficiary (since there are 5 beneficiaries) subject to gift tax or gift tax and generation skipping tax depending on the generation of the beneficiary?=======>>>A mentioned above. GST tax was enacted so that all family pty ‘d be subject to a tax(whether gift tax, estate tax/ gst tax) at least once in EACH GENERATION. Before the gst tax, it was possible to avoid a tax on each generation either I guesss by transferring pty in trust to a child for life after which the pty ‘d pass to next generation w/o additional gift/estate tax OR transferring directly to a grandchild from a grandparent, outright or in trust, subject to only to a single estate/gift tax , avoiding taxation on the child’s or mid genration’.so the gst tax may apply to gifts/ direct skips occurring at your death to skip persons.SO it imposes a tax on both outright gifts and transfers in trust to or for the benefit of persons.ALSO gst t ax is intended to duplicate the consequences if you gave the pty to a child (rather than a grandchild) and your child in return gave it to your grandchild. In this sort of two transfer situation, two taxes ‘d be imposed; consequently, the gst tax adds a second tax to gifts you make directly to your grandchildren. note; immediate gst tax rule does not apply if you transfer pty to a grandchild after the death of your child, the parent of the grandchild. gst tax is imposed only if the transfer avoids incurring a gift or estate tax at each generation level.



Digg this Post!Add Post to del.icio.usBookmark Post in TechnoratiFurl this Post!Reddit! stumble!bookmark in google!Share on Facebook!
Reply With Quote
Ads
Reply


Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

vB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
What is the due date to File a Gift Tax Return? TaxGuru Estate Planning 1 04-27-2013 02:07 PM
Gift Tax Return. define 2632(b) jacrocke Trusts and Gift Tax Returns 0 09-30-2009 03:48 PM
What Form is used to file a Gift Tax Return? TaxGuru Estate Planning 0 06-17-2009 03:40 PM
What are the filing requirements to file a Gift Tax Return? Kathy Trusts and Gift Tax Returns 1 04-01-2008 09:39 AM
What is the required Form to file a Gift Tax Return? disa Trusts and Gift Tax Returns 1 04-01-2008 09:24 AM

Follow us on Facebook Follow us on Twitter Google Buzz Rss Feeds

» Categories
 
Individual
 » Income
 » IRA/Sep
 » Medical
 
Corporations
 » Payroll
 
Forum for CPAs
 
Financial Planning