Gifts (Portfolio 845)


Henry Lischer, Jr.

Emeritus Professor of Law

Southern Methodist University

At a glance

I. Overview of Federal Gift Tax
II. Persons Subject to Gift Tax
III. Definition of Taxable Gift
IV. Completion of a Gift: Relinquishment of Dominion and Control over Transferred Property
V. Transfers Involving Married Persons
VI. Exercise or Release of Power of Appointment as Gift
VII. Valuation of Gifts
VIII. Disclaimers
IX. Gift Tax Exclusions
X. Gift Tax Deductions
XI. Effect of Gift Tax Treaties
XII. Computation of Gift Tax
XIII. Returns and Payment of Gift Tax
XIV. Income Tax Consequences Associated with Gift Transfers
XV. Planning Considerations


The Bloomberg Tax Portfolio, Gifts, No. 845, discusses the definition of “taxable gift” and analyzes when a transfer subject to the gift tax occurs. Donative intent on the part of the transferor is not required for the transfer to be a taxable gift. Instead, an objective test determines whether a gift has been made: did the transferor receive sufficient consideration for the transfer? The gift tax applies to direct gifts of property, transfers in trust, and transfers of real, personal, tangible, and intangible property, and it also applies to indirect gifts such as the payment of another's expenses (except for certain expenses such as tuition and medical) and interest-free loans.

This Portfolio discusses general principles relating to completed transfers, incomplete transfers, transfers involving married persons, and transfers of community property. Special problems can arise upon the exercise or lapse of certain powers of appointment and in connection with jointly held properties, and Gifts Portfolio describes gift tax implications that the practitioner should consider before advising the creation or exercise of a power or creating or severing a joint-property relationship.

Principal portions of this Portfolio pertain to valuations, the special valuation rules under Chapter 14, transfers subject to liabilities, application of the §2503 exclusions, the distinction between present and future interests, gifts of life insurance, gifts to minors, the gift tax marital and charitable deductions, and computation of the gift tax.

For additional relevant Bloomberg Tax Portfolios, check the “Estates, Gifts, and Trusts Portfolio Classification Guide” in the Bloomberg Tax Portfolio Index binder.

This Portfolio may be cited as Lischer, 845 T.M., Gifts.

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