
It is important to know when gifts you make trigger your obligation to file a federal gift tax return (IRS Form 709, United States Gift [and Generation-Skipping Transfer] Tax Return). I have heard the IRS doesn’t take kindly to an individual who fails to file required tax returns 🙂
If a person makes an annual gift or a total annual gift to one person over the annual exclusion, a gift tax return must be filed with the IRS. However, unless the total of the gifts goes beyond the unified credit, 5.4 million, the person will not owe any gift tax.
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