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Author: criser Three stars, 500 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 121316  
Subject: Re: life tenancy Date: 1/26/2000 12:22 AM
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The value of the life estate is based on mortality tables published by the IRS which are based on your age. The value of the gift would be the FMV less your remainder interest in the property based on these tables. If the net value exceeds 10k you may be required to file a gift tax return.

You may also want to at least consider the benefits of the property passing to your donee thru your estate rather than by gift. The donee may be losing out on a potential step up in basis on the gifted property.


You'll be required to file a gift tax return no matter what the value of the remainder is because remainder interests are not "present interests" (they're "future interests") and the $10K annual exclusion only applies to gifts of present interests.

The remainder beneficiaries will get a full step-up in basis because the full value of the property will be included in the decedent's estate.

Chris Riser
criser
criser@mayer-riser.com
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