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A gift tax return was filed for the surviving spouse reporting !00% gift of real property. Half of the property had been in a bypass trust, then purchased by her with cash so that she could make the gift. The purchase was not reported on the Bypass Trust return. (year 2004)
When surviving spouse passed away in 2005, trustee said that the real property had been gifted 1/2 from the spouse and 1/2 from the bypass trust, after permission by the other two beneficiaries. We amended the return to show 1/2 of the gift and only took the 1/2 to the 706.
Taking the 1/2 to the 706 resulted in a nontaxable estate (but we did file). Now what do I do to unamend the return. I will have to amend the 706 to show the complete gift and also report the purchase from the Bypass, and the Bypass gain, right?
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Power Member
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Please tell us about the deed(s) the trustee executed. I assume that when you amended the returns the first time, the trustee gave you copies of deed(s) conveying the land from the trusts to the donee(s).
John Jacobson
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Member
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| Now that I have all of the back up documents (I hope), here is the list: Grant Deed - for consideration Family Trust grants to now deceased as to an undivided one-half interest. Agreement for Purchase and Sale between now deceased and the Family Trust Gift Deed - for no consideration now deceased grants all of Grantor's right to daughter Appraisal by Probate Referee - Family Trust for undivided 1/2 interest plus individual for undivided 1/2 interest
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Power Member
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It looks like you are right, but please tell us the relationship between the bypass trust and the family trust. If the 50% interest was not titled to the bypass trust, but still reported as such, please explain.
John Jacobson
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Member
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Last Login: 5/2/2011 5:21:23 PM
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| Family Trust is the Bypass Trust
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