Contents

ESTATE AND GIFT TAX CONSIDERATIONS(l) Liability for Gift TaxGift tax is computed on the value of taxable gift transfers. Liability to pay the taximposed is upon the donor—the transferor of the gift property. 69(m) Split Gifts Between SpousesThe federal gift tax law allows a nontransferor spouse to agree to share equallyin gifts made by the transferor spouse. 70 This permits use of the nontransferorspouse’s annual exclusion and unified credit. If the annual exclusion is split, a$22,000 gift-tax-free transfer can be made in lieu of the regular $11,000 exclusionper donee.When both spouses consent 71 to a split gift, each becomes jointly and severallyliable for the entire gift tax liability. 72Gift splitting is not permitted on transfers wherein one spouse gives theother spouse a general power of appointment over the property. 73(n) DisclaimersA person who holds an interest in property, including powers with respect toproperty, may refuse his or her interest without the refusal being treated as a taxabletransfer to that person. 74 This refusal is termed a qualified disclaimer. To qualify,the disclaimer must be an irrevocable and unqualified refusal to accept aproperty interest. 75 Furthermore, to be effective, the disclaimer must meet certainother prescribed form and notice requirements.When property, or an interest therein, passes to another as a result of a qualifieddisclaimer, the person disclaiming is not treated as having made a taxabletransfer. 76§ 8.3 FEDERAL ESTATE TAXThe second part of the unified federal transfer tax system is the estate tax. Thisaspect of the system concerns transfers of property that take place upon thedeath of an individual. 77(a) Gross EstateThe first step in determining estate tax liability is determination of the value ofthe decedent’s gross estate. The value of the gross estate is defined as includingthe date-of-death value of “all property, real or personal, tangible or intangible,wherever situated.” 78 The value of the gross estate also includes the “value of all69 IRC § 2502(c).70 IRC § 2513.71 Required by IRC § 2513(a)(2).72 IRC § 2513(d).73 IRC § 2513.74 IRC § 2518.75 lRC § 2518(b).76 Reg. § 25.2518-1(b).77 IRC § 2001.78 IRC § 2031. 234