A Valuation Report Does Not Meet Gift Tax Disclosure Regulations

By Drudy, Philip | The CPA Journal, April 2000 | Go to article overview

A Valuation Report Does Not Meet Gift Tax Disclosure Regulations


Drudy, Philip, The CPA Journal


Filing a gift tax return, once a simple task, has evolved into a delicate process that requires a high level of due diligence to comply with the regulations.

On December 3, 1999, the IRS issued final regulations regarding the adequate disclosure of information necessary to trigger the statute of limitations on transfers made after December 31, 1996. The new regulations prescribe how to prevent the revaluation of gifts on later gift tax returns and on the transferor's estate tax return. If the return meets the adequate disclosure requirements of Treasury Regulations section 301.6501(c)l, then the normal three year reassessment period applies, and the IRS is time barred from revaluing the gift after the running of the statute of limitations.

Under the final regulations, a transfer is adequately disclosed on the gift tax return if it apprises the IRS of the nature of the gift and the basis for the reported value. The IRS will consider the transfer adequately disclosed [Treasury Regulations section 301.6501(fj(2)) if the return includes the following information or has it attached: A description of the transferred property and any consideration paid to the transferor;

The identity of and relationship between transferor and transferee;

If the property is transferred in trust, the trust identification number and a brief description of the terms of the trust (in lieu of a description, a complete copy of the trust instrument can be attached);

A detailed description of the method used to determine the fair market value of the property transferred, including disclosure of any discounts taken and the fair value of the underlying assets (the taxpayer bears the burden of demonstrating that fair market value is properly determined); and

A statement describing any position contrary to any proposed or temporary Treasury regulations or revenue rulings published at the time of the transfer.

Valuation Report Requirements

A valuation report will suffice in lieu of a detailed description of the method used to determine the fair market value of the property transferred. To qualify, the report must be prepared by an appraiser that is held out in the community as such and performs appraisals on a regu lar basis. In addition, the report must describe the appraiser's qualifications, and the appraiser must be independent.

The appraisal report must contain the following information:

Date of the transfer, date the appraisal was performed, and purpose of the appraisal

Description of the property transferred Description of the appraisal process and procedures followed

Descriptions of assumptions, conditions, or restrictions on the transferred property that affected the analysis or conclusion. …

The rest of this article is only available to active members of Questia

Sign up now for a free, 1-day trial and receive full access to:

  • Questia's entire collection
  • Automatic bibliography creation
  • More helpful research tools like notes, citations, and highlights
  • Ad-free environment

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items

Items saved from this article

This article has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this article

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited article

A Valuation Report Does Not Meet Gift Tax Disclosure Regulations
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Full screen

matching results for page

Cited passage

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited passage

Welcome to the new Questia Reader

The Questia Reader has been updated to provide you with an even better online reading experience.  It is now 100% Responsive, which means you can read our books and articles on any sized device you wish.  All of your favorite tools like notes, highlights, and citations are still here, but the way you select text has been updated to be easier to use, especially on touchscreen devices.  Here's how:

1. Click or tap the first word you want to select.
2. Click or tap the last word you want to select.

OK, got it!

Thanks for trying Questia!

Please continue trying out our research tools, but please note, full functionality is available only to our active members.

Your work will be lost once you leave this Web page.

For full access in an ad-free environment, sign up now for a FREE, 1-day trial.

Already a member? Log in now.