Unreported gifts

Many people transfer real estate titles to heirs or other family members without filing a gift tax return. The IRS has never checked on this to any great extent, but it is starting to do so now. If the transfer was done for anything less than fair market value, it could trigger the need for a gift tax return. Most people would not owe any actual gift tax, because their gifts are under the tax threshold. However, the law says a gift tax return must be filed. A gift tax return is supposed to be filed if you give any one person more than $13,000 during a calendar year. (The filing threshold was $10,000 several years ago; it has been gradually raised over the past few years to the present threshold of $13,000.)