Tell All

Gift-giving: Inform the IRS thoroughly to avoid an audit.
Magazine Contributor
2 min read

This story appears in the December 2000 issue of Entrepreneur. Subscribe »

Thinking about giving out some generous gifts this month to ease April's tax bill? You'll now need to adhere to some new rules concerning gift-giving. In essence, if you provide the IRS with adequate information regarding a gift, the tax agency has only three years to audit your return and won't be allowed to reopen it in a later estate audit. If you fail to provide adequate information, the IRS can audit you any time. As you know, taxpayers can make annual gifts of up to $10,000 ($20,000 per couple) tax-free to children, grandchildren or anyone else they designate.

How will the IRS know whether you've disclosed everything you should disclose? It says if you're giving anyone more than $10,000 in one year, you must file a gift-tax return by April 15 of the next year. Among other things, the new rules require you to describe the gift and give the name and relationship between the giver and the recipient. If you're giving away real estate or an interest in the family business, you must describe the valuation method used to determine its value or provide an appraisal from a qualified appraiser.


Joan Szabo is a writer in Great Falls, Virginia, who has reported on tax issues for more than 13 years.

My Queue

There are no Videos in your queue.

Click on the Add to next to any video to save to your queue.

There are no Articles in your queue.

Click on the Add to next to any article to save to your queue.

There are no Podcasts in your queue.

Click on the Add to next to any podcast episode to save to your queue.

You're not following any authors.

Click the Follow button on any author page to keep up with the latest content from your favorite authors.

Former Apple CEO John Sculley Shares 4 Key Strategies for Growing and Marketing Your Business