Tax Questions

March 09, 2000

Members of the Maryland Association of Certified Public Accountants are answering readers' tax questions through April 15.

I am giving land to a daughter. I want to claim $10,000 per year as a gift to her. Do I show this on my tax return, and, if so, how? Are there other forms to file?

Gifting to other than a charity is not an event with income tax consequences. So, there is no reporting on the income tax filings. The annual exclusion from gift tax is $10,000; so, that amount gifted to a daughter each year incurs no gift tax.

Some practitioners would recommend filing a Form 709 gift tax return each year. In this way, the value of the land may not be challenged once the statute of limitations closes on the gifting years. Taxpayer would be well advised to have the land appraised periodically to lend credence to the portion that is gifted each year.

Be sure the portion of the land gifted each year has a value of $10,000 or less.

Leo E. Bruette, CPA, BDO Seidman, LLP

The above advice is for general purposes only and is not intended as legal, accounting or tax advice. Specific situations may vary.

To ask a tax question, call Sundial, The Sun's telephone information service, at 410-783-1800. Call 410-268-7736 in Anne Arundel County, 410-836-5028 in Harford County, 410-848-0338 in Carroll County. Using a touch-tone phone, punch in the four-digit code 6225 after the greeting. To submit questions by e-mail and access an online tax guide, go to The Sun's Web site at www.sunspot.net/tax.

Selected questions will be answered in the Business section. No questions will be answered personally.

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