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In 2017 My elderly aunt gifted a parcel of real estate

In 2017 My elderly...

In 2017 My elderly aunt gifted a parcel of real estate appraised at $203,500 to a Trust set up for her great niece.. we are trying to complete a 2017 form 709 thinking it should be a simple process, but it is a little daunting. We also are not sure we will be able to determine what my aunt's basis in the property is since she inherited it from her own dad many, many years ago and records are scarce. Can you help as I stare at this empty 709 form??!!

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Customer reply replied 30 days ago
Will you be able to help me line by line with the 2017 Form 709 ?
Answered in 17 minutes by:
3/28/2018
Cole Parker
Cole Parker, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 90
Experience: Certified Public Accountant
Verified

First of all, has the property indeed been gifted or just placed in a trust until specific future events trigger the land to be removed from the trust? You may not need to file a Form 709 until all rights have been released from your aunt and a title has transferred.

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Customer reply replied 30 days ago
the property has been indeed gifted ("transferred and delivered") to the trust for the benefit of the great niece.
and even The trust attorney actually said my aunt would need to complete the 709.

Thank you for the clarification. In determining basis of property (when no other documentation is available for property purchased many years ago), one can use the county assessment records - most the times you have to call and request and sometimes they'll have to retrieve them from the archives. You also use a stepped up basis at the time your aunt's father passed away - that may be easier to locate at the county assessor office.

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Customer reply replied 30 days ago
ok great... we should be able to get close to a basis then..... but to the broader issue.... how the heck to fill out this daunting 709 form?? which sections to use, etc etc
Customer reply replied 30 days ago
could sure use some line by line assistance.....!!

Start by completing Sch A Part 1 on pg 2. Then go down to Part 4 - Taxable Gift Reconciliation on pg 3. After those small sections are completed, you'll need to then basically transfer what you entered and calculated on those sections into the first page. On the first page Lines 1-19 just answer what you know and if there's something that does not make sense then it's probably not applicable so you can leave it blank or answer no. It's difficult completing tax forms by hand. You may benefit and feel better if you find a local CPA who's able to use their software. Just a thought.

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Customer reply replied 30 days ago
ok I understand so far..... but here's another question... why would Sch A part 2 not be used ? isn't a great niece a skip.? and is Sch D not involved due to generation skipping..?

The Generation-Skipping Transfer (GST) rules get very involved and what you or I sometimes think as being logical isn't necessarily the case when filing tax returns - especially gift tax returns (709) estate and trust returns (1041) and such. Per the form 709 instructions,.."if you make a nontaxable gift (which is a direct skip) to a trust for the benefit of an individual, this transfer is subject to the GST tax unless: (1) during the lifetime of the beneficiary, no corpus or income may be distributed to anyone other than the beneficiary; and (2) if the beneficiary dies before the termination of the trust, the assets of the trust will be included in the gross estate of the beneficiary." These rules and regulations become more and more complex. At this point, I feel it's going to be extremely beneficial for you to retain the services of local CPA who can help you file the gift tax return to make certain all areas of the forms that need addressed are in fact addressed properly. I know this may not be what you'd like to hear but I feel that it would help out your mind at ease knowing everything is filed accurately.

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Customer reply replied 30 days ago
I understand completely..... unfortunately CPA's aren't cheap , but oh well .... much obliged for your assistance.... have a wonderful Easter holiday.... take care.....

Thank you and I hope you have a wonderful Easter weekend as well. Please take care.

Cole Parker
Cole Parker, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 90
Experience: Certified Public Accountant
Verified
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Cole Parker
Cole Parker
Cole Parker, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 90
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