David R. and Mia A. Baker live at 4620 Bayshore Road, Dunedin, Florida 34698. Formany years, the Bakers were successful real estate developers. They retired just prior to the downturn in the market but still own several tracts of land suitable as housing projects. Their financial adviser has suggested that they make gifts of some of these investments for several reasons. First, the value of real estate is depressed, so the amount subject to a gift tax will be lower than usual. Second, the $5.12 million exclusion amount may not be permanent and should be used while still available.
Based on this advice, the Bakers are not hesitant in making large gifts to their adult children: Logan and Ethan Baker and Ella Wilson. These and other gifts made by the
Bakers in 2012 are summarized as follows.
Donor
Transfer David Mia
Vacation rental cottages in Clearwater Beach (FL) to be held as joint tenants by Logan, Ethan, and Ella. Acquired in 2000 at a cost of $1,200,000.
$1,100,000 (D) $1,100,000(M)
Tract of land on the outskirts of Fort Myers (Lee County)to be held as tenants in common by Logan, Ethan, and Ella. Acquired in 1975 at a cost of $1,900,000. 1,700,000(D) 1,700,000(M)
Rental condominiums in Tampa (FL) to be held as tenants in common by Logan, Ethan, and Ella. Acquired in 2004 at a cost of $1,500,000.
2,400,000(D) 2,400,000(M)
Mia paid the doctors and the hospital for her Aunt Chloe's liver transplant.
-0-(D) 50,000(M)
Purchased a cabin cruiser as a fiftieth wedding anniversary present for David's parents (Addison and Anthony Baker).
130,000(D) -0-(M)
Made a political contribution to Governor Scott's reelection campaign fund. 500(D) 500(M)
David sent a check to his niece, Jennifer Majors, to help her pay the tuition at Mills College.
30,000(D) -0-(M)
Prepare 2012 gift tax returns (Form 709) for the Bakers assuming that the § 2513 election to split gifts is made. The Bakers have made no prior taxable gifts. Relevant Social Security numbers are 123-45-6781 (David) and 123-45-6782 (Mia)