Bob and Paige are married and live in a common law state. Bob owns some real estate (fair market value of $560,000) which they would like to give to their five adult married children. The spouses of their children (e.g., son-in-law, daughter-in-law) are
to be included in the gifts. Bob and Paige do not want to use any of their unified transfer tax credit. Assuming an annual exclusion for the Federal gift tax of $14,000, suggest a viable way to structure the transfer.
With ten donees and two donors, $280,000 per year (10 × 2 × $14,000) can be given without exceeding the annual exclusion. Thus, a 50% undivided interest in the real estate can be transferred each year. If the two gifts occur within close proximity to each other (e.g., December and January), the value of the property needs to be determined only once.
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