The annual gift tax exclusion is now $11,000 per year per
recipient. Technically, any gifts below that limit don’t
require you to file a gift tax return.
Nevertheless, you may want to file a gift tax return
anyway, even though such a filing may not be required.
That’s especially true if your tax exclusion might be
challenged: the IRS might question the valuation of the
gift, for example, or say that the recipient did not have
access to the assets right away.
Under current law, the IRS has three years after a gift
tax return is filed to raise any legal or factual issues.
If no challenge is filed in that time period, and all
the information was adequately disclosed, the exclusions
will be upheld.
Thus, it may pay to file a return and start the clock
running. If you don’t file a gift tax return, exclusions
you take today may be questioned decades from now, when
it’s difficult to support your claims.
