GIFT TAXES

Structuring tax-free gifts

Your gift tax return (Form 709), which covers taxable gifts made during 2010, is due at the same time as your individual tax return: on April 18 (thanks to “Emancipation Day,” a Washington, D.C. holiday celebrated this year on April 15).

That means taxpayers who gave more than $13,000 ($26,000 if married filing jointly) in cash, property or other assets to anyone other than a spouse must report the gift on their return. If you received a gift, you don’t have to report it — the person who made the gift is responsible for paying any tax due.

Even if no tax is owed, any gift above the $13,000 limit must be reported on Form 709 so the IRS can offset it against your $5 million lifetime exclusion. You must also report any gifts that are not a present interest (when beneficiaries don’t get access until later), no matter how small.

Married couples can combine their annual exclusions and lifetime tax-free amounts to give away up to $26,000 to whoever they want without having it count against the $5 million lifetime exclusion by gift-splitting. Usually, couples must file a gift tax return and consent on each other’s return to gift-split. Gifts to a spouse do not need to be reported — unless your spouse is not a U.S. citizen.