This unlimited marital deduction for gift tax purposes is another reason that the payment of a gift tax return is so rare. Jim and Beth are married and own most of their property as tenants by the entireties. They have been advised to separate the ownership of some of their assets for estate tax purposes. Each can transfer as much property to the other as he or she wishes, without having to file a gift tax return or pay a gift tax. There is a charitable gift tax deduction.
Most people are aware of the favorable income tax treatment for gifts to charities.
Few think about the gift tax consequences when they make annual donations. Most gifts to charities qualify for the charitable gift tax deduction and do not result in the payment of a gift tax. Sometimes a gift tax return is required to be filed. Some donors employ trusts to either pay the income or a remainder interest to a charity. These trusts require significant planning and tax knowledge.