IRS checking intra-family gifts via state real estate records

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in Small Business Tax

The IRS is now using state real estate records to help investigate intra-family gifts that haven’t been reported on Form 709, United States Gift (and Generation-Skipping Transfer) Tax Return. The form must be filed for transfers of property valued above $13,000, even though the current lifetime gift tax exemption is $5 million.

According to an IRS document referenced in The Wall Street Journal, 323 taxpayers have been examined for failing to report possible gifts the last two years, 217 were being examined and another 250 more were being considered for review.

Some of the states providing information on real estate transactions are Connecticut, Florida, Hawaii, Nebraska, New Hampshire, New Jersey, New York, North Carolina, Ohio, Penn­sylvania, Tennessee, Texas, Virginia, Washington and Wis­consin. A chart in the document indicated noncompliance rates of 60% in Connecticut, 90% in Florida, 60% Nebraska, 100% in Ohio, 90% in Virginia, 80% in Washington and 50% in Wisconsin.

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