Magazine article The CPA Journal

Proposed Regulations on Adequate Disclosure of Gifts

Magazine article The CPA Journal

Proposed Regulations on Adequate Disclosure of Gifts

Article excerpt

In December 1998, the IRS issued proposed regulations relating to the new adequate disclosure requirements for gifts made after August 5, 1997. The proposed regulations indicate the information that must be included either on the gift tax return or in an attached statement for the related transaction to be considered adequately disclosed for purposes of commencement of the statute of limitations.

Such information should include the following:

A description of the transferred property and any consideration received by the transferor;

The identity of, and relationship between, the transferor and the transferee;

A detailed description of the method used to determine the fair market value of property transferred, including any relevant financial data and any discounts, such as discounts for blockage. There are specific requirements in the case of transfers of entities that are not actively traded that own interests in other nonactively traded entities; and

A statement of the relevant facts affecting the gift tax treatment of the transfer that reasonably may be expected to apprise the IRS of the nature of any potential controversy concerning the gift tax treatment of the transfer. …

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