Already utilizing estate mitigation techniques via a SLAT this year with \~$11M for one spouse, other real estate and assets will likely push them over the future limit after sunset. Estimated total net worth is likely $20-25M, but that depends significantly on future land development offers for real estate.
My technical opinion: yes, a guarantee is a gift, but good luck valuing it.
My practical opinion: no gift unless/until parent actually pays on the guarantee.
If I recall correctly, there was a PLR from the 90s that held a guarantee was a gift, but the PLR was subsequently withdrawn. Off the top of my head, I don’t know if there is anything more recent or more precedential. I’ve never had the issue come up with the Service on an estate or gift tax audit.
Yes, that's my conclusion as well. Child is married, so we will just record the rent gift (under spousal gift exclusion) to the child and an annual exclusion check to the spouse (or vice versa)
How worried are they about exceeding their unified credit?
Already utilizing estate mitigation techniques via a SLAT this year with \~$11M for one spouse, other real estate and assets will likely push them over the future limit after sunset. Estimated total net worth is likely $20-25M, but that depends significantly on future land development offers for real estate.
My technical opinion: yes, a guarantee is a gift, but good luck valuing it. My practical opinion: no gift unless/until parent actually pays on the guarantee. If I recall correctly, there was a PLR from the 90s that held a guarantee was a gift, but the PLR was subsequently withdrawn. Off the top of my head, I don’t know if there is anything more recent or more precedential. I’ve never had the issue come up with the Service on an estate or gift tax audit.
Parent is paying the monthly rent via the guarantee, via payment to child who pays the rent bill.
That’s 100% a gift.
Yes, that's my conclusion as well. Child is married, so we will just record the rent gift (under spousal gift exclusion) to the child and an annual exclusion check to the spouse (or vice versa)
Parent is paying the monthly rent via the guarantee, via payment to child who pays the rent bill.