Friday, May 27, 2011

THE IRS CRACKS DOWN ON UNPAID ESTATE TAXES

Distributees beware! The IRS is now using state land-transfer records to discover unpaid Estate Taxes on gifts of real property to family members.

Although federal exemptions are currently at $5 million, gifts amounting to $13,000.00 or more must be reported to the IRS by filing Form 709 for U.S. gift and generation-skipping transfer taxes.

As a result of these investigations in which the IRS uses land-transfer records as evidence, many people are being examined, and possibly taxed, fined, or penalized.

Lesson: If a gift of real property is worth more than $13,000, even if within the lifetime exemption amount of $5 million, a gift-tax return must be filed or it must be reported!

SOURCES:http://online.wsj.com/article/SB10001424052702304066504576345672097256428.html?mod=WSJ_RealEstate_LeftTopNews

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