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Robin D.
Robin D., Senior Tax Advisor 4
Category: Tax
Satisfied Customers: 15328
Experience:  15years with H & R Block. Divisional leader, Instructor
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My husband passed away May 2014, I gifted property June 2014

Customer Question

My husband passed away May 2014, I gifted property June 2014 to my daughter, but when I filed the gift paperwork to IRS for that tax year they came back with I would owe 1100.00 dollars. I don't understand as my husband passed away in May of 2014 and it was the last year I could claim as married, why I'm being charged as the property was valued at 20,000. It seems they are only giving me credit for my allowance and not my husband, as the property was under both of our names. So the allowance was only being given for just me and not both of us, which causes money due instead of nothing due.
Submitted: 2 years ago.
Category: Tax
Expert:  Robin D. replied 2 years ago.
Hello and thanks for trusting me to help you today. I am a tax adviser with over 20 years of experience.
The date you gifted the property would be used and you would need to claim the full amount for yourself, that is true.
The fact that you are showing a balance due on the gift may mean that you did not claim the lifetime allowance or you have used up your lifetime allowance.
The federal unified credit allows you to postpone your gift tax bill (this is your lifetime allowance). Under gift tax law (for deaths in 2014), each of us can give away or leave up to $5.34 million without owing federal gift tax. So, for example, if during your life you give your children your house, worth $1 million, plus another $4 million in stocks and bonds, no federal gift tax will be due. The exemption amount is indexed for inflation and goes up each year.
If you have not already used up all your Unified Credit, you should not owe any Gift Tax.
If the property was valued at $20,000 you would use first your $14,000 for the year (that would leave $6000 to be applied against the Unified Credit)then reduce your lifetime amount under the Unified Credit.
If by chance you have used up all your lifetime allowance then yes, you would then owe Gift Tax.
I would strongly suggest you have the Form 709 reviewed by a Tax Professional near you to make sure it was completed correctly.
Expert:  Robin D. replied 2 years ago.
Please let me know if you need more information or you want me to clarify the information you have read above.