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Stephen G.
Stephen G., Sr Income Tax Expert
Category: Tax
Satisfied Customers: 4037
Experience:  Extensive Experience with Tax, Financial & Estate Issues
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HelloNeed to lower my assets for next 2years.Planning

Customer Question

Hello
Need to lower my assets for next 2years.
Planning gift to my mother $280 K and yes will file form 706 for 2013.

question: at end of second year would reverse the gift and have her gift it back to me.....and yes would file form 706
my accountant sais ok as long file form 706....in either direction. He is ready retire and not sure has expertise this area of gifting Just want a 2nd opinion....
Tx
Submitted: 11 months ago.
Category: Tax
Expert:  Stephen G. replied 11 months ago.

Stephen G. :

Hello, my name isXXXXX & I'll be helping you today. My goal is to give you a complete & accurate answer that you can understand.

Stephen G. :

First of all, the form you need to file is a Gift Tax Return on Form 709.

Stephen G. :

Form 706 is the Federal Estate Tax Return.

Stephen G. :

The only risk you run is that if you make the "gift" with the intention of taking the gift back (which obviously requires the agreement of the donee), and you are gaining some financial advantage by doing this, you could run the risk of a fraud allegation. It isn't a tax issue as, there would be no gift or income tax due in any case.

Stephen G. :

So in the circumstances you describe, including filing the gift tax returns, the IRS won't care one way or the other. I don't know the reason you want to divest yourself of the money, but that could be important.

Stephen G. :

Often, you would be asked if you made any transfers of assets without consideration within a specific look-back period if you are applying for some type of financial assistance.

Stephen G. :

Since your transfer will be documented in a gift tax return, it would be difficult for you to omit that information if asked.

Stephen G. :

Questions?

Customer:

So to get it straight .... .as far as IRS does not matter gifting forward and then backwards

Stephen G. :

Not a problem.

Customer:

as long use form 709 they are ok..........

Stephen G. :

In reality, it probably wouldn't matter even if you didn't file the gift tax return although I can't advise you to do that.

Customer:

I am filling out FAFSA formulary for one of my kids applications to colleg...

Customer:

the lower assets ... .the lower expected family contribution ratio.........the higher possibility of financial assistance and colleges do not care if assets where moved around in base year according to a expert i am working with in this matter...heard of FAFSA ?

Stephen G. :

Of course, I've filled out hundreds of those forms/applications over the years.

Stephen G. :

Now it is all electronic, I understand.

Stephen G. :

Questions?

Stephen G. :

If you need to contact me again with any tax or financial questions, you can just ask for "Steve G" at the beginning of your question. Thanks again for using us for your tax and financial questions. You may get a short survey from the site; if it isn't too much trouble I would appreciate it if you would answer it; the survey results are used to rate our performance;

Stephen G., Sr Income Tax Expert
Category: Tax
Satisfied Customers: 4037
Experience: Extensive Experience with Tax, Financial & Estate Issues
Stephen G. and 2 other Tax Specialists are ready to help you

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