Tax Planning/gift tax


My domestic partner is giving me $60,000.00.  His total estate is about $750,000.00.  He plans to "gift" me half now in 2012 and the other half in 2013.  I know the allowance for 2012 is $13,000.00, going up to $14,000.00 for 2013.  How does he report the excess gift of $17,000.00 (2012) and $16,000.00 (2013)?  Will there be any tax payment at the time of the extra gift to either of us?  He will not come anywhere close to the Lifetime Gift Exclusion regardless of what happens with the "fiscal cliff."  Does that leave us with any gift tax liability when his estate is settled?  Will it complicate the settling of his estate (which is quite simple.)  Thank you so much for your help.

The excess gift is reported on a gift tax return, Form 709.  There may or may not be an issue with the lifetime exclusion.  The factors that must be considered are: (1) what is the total value of the estate for estate tax purposes; it is not the same as the total value of the estate because there are items that both are and are not included in the value calculation for estate tax purposes; and (2) the lifetime exclusion may or may not be a factor, depending on the answer to #1.

You say the estate is simple, but keep in mind that for purposes of the estate tax return, liabilities are not subtracted from assets and life insurance counts as an asset, among other considerations.

There are many planning techniques that could be done to avoid estate taxes.  This is one of the most complicated areas of the tax code and is difficult to explain all the nuances within a forum like this.

My business partner holds a masters degree in estates and taxation and is a national expert on this subject.  Perhaps a brief consult with him would assist in clarifying and additional information you might need.

I hope this help!

Tax Planning

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As an Enrolled Agent, I am fully capable of providing tax advice as it relates to personal and business income taxes. Enrolled Agents are the only Federally licensed tax practitioners and are admitted to practice before all administrative functions of the IRS. My specialty is working with small business owners who file Schedule "C" and helping them to structure their business in such a way as to maximize as many tax advantages as possible. I also enjoy working with individuals who have both routine as well as complex tax situations. I prefer to concentrate on individuals and small business tax planning.


I have a 25 year background in financial services including tax, bookkeeping, insurance, real estate and securities. I was previously the Chief Financial Officer of a local and national franchise organization. I am currently semi-retired, but used to own (in partnership with another EA) an individual and small business financial engineering firm where I work with nearly 2,500 individuals and small business owners in nearly every state and almost every continent, assisting them in all aspects of their tax and financial well-being. I have prepared or reviewed more than 8,000 tax returns in my career.

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Enrolled Agent, Admitted to Practice Before the IRS, Accredited Tax Preparer, Fellow of National Tax Practice Institute, Certified QuickBooks ProAdvisor (1999-2011), Sleeter Group Certified QuickBooks Consultant, Life & Disability Insurance Agent License (California, Texas, Maine), Real Estate Agent License (California); Many years of continuing education in all these fields.

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