- quote -

Wouldn't the answer depend on whether the gift was in the
same year as the marriage? Transferring assets between
spouses usually isn't reportable, and if you're married by
the end of the year, the IRS considers you to be married all
year.

R's,
John

PS: my wedding anniversary is Dec 31.

<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

William Brenner wrote:

- quote -

I dueled on this very xubject with an Ohio attorney (I
recall his name was Jon Woodson) about 13 years ago. In
the end, I was compelled by research and professional
ethics to concede that Mr. Woodson was correct that the
ring must be returned if the marriage does not occur. Upon
marriage, it bemomes a non-taxable gift between spouses.
Thus, no gift tax return should have been filed and none
need be filed in the current situation.

Because I have the privilege of reading submissions before
they are posted, I see that my distinguished colleague,
Harlan Lunsford, disagrews with this position. It is my
long standing poliicy to defer to him on issues of taxation
and Scotch whiskey where he has demonstrated expertise and
to ignore him on issues of Baseball where he is so obviously
uncalibrated. I make an exception here because the gift is
not complete until the marriage has been completed.

Dick

<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

William Brenner wrote:

- quote -

It never occurred to me that one might have to pay a gift
tax on an engagement ring.

Whether you owe gift tax might depend on the laws of the
state in which you reside. In some states, an engagement
ring is actually a contingent gift. If the wedding does not
take place, depending upon the circumstances, the ring may
go back to the giver. If the wedding does take place, the
gift is to a spouse, and the gift tax doesn't apply, does
it?

<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

William Brenner wrote:

- quote -

What's his, is his and if the value exceeds the gift tax
threshold, then yes.

ChEAr$,
Harlan

<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

William Brenner wrote:

- quote -

As I understand engagement rings, they are not considered a completed
transaction (gift) until the marriage takes place. If the wedding is
called off, there is an expectation that the ring is returned, not kept,
or sold on eBay. As long as the wife is a citizen, there is no limit on
gifts between husband and wife. I don't see that the first gift return
was needed. If the marriage was canceled and the ring returned, would
she have filed a gift return to give it back?
JOE
www.joetaxpayer.com

<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

On Sep 16, 12:27?am, William Brenner <wbren...[at]nospamplease.netwrote:

- quote -

Yes. Keep in mind that the "cost basis" of the gift will
have been adjusted to the DOD of the first recipient and
that the "taxable gift" amount is determined against the
current gift limit. Until he has made over $1 M of such
taxable gifts, he won't owe any gift tax.

H`owever, if he waits until the nuptials to formally "gift" the ring,
it would not be subject to any gifting limit. Gifts between spouses
are not taxable, regardless of size.

<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

William Brenner <wbrenner[at]nospamplease.net> wrote:

- quote -

In most states courts have held that engagement rings have
to be returned if the wedding doesn't take place. That
means that the gift of the right isn't complete until after
the wedding takes place.

Until a gift isn't complete, no gift is considered "made" so
no gift tax return is required. By the time the gift
becomes complete the couple are married. And a gift tax
return is not required for gifts between spouses, since
there is an unlimited gift tax exemption for such gifts.

T`he short answer is, in my opinion, no, a gift tax return is almost
never required when an engagement ring is given, irrespective of
value.

Stu

<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

The son of a friend asked me this one.

In 2004, he became engaged to a young lady and gave
her an expensive diamond ring -- costing well above
the free gift limit in effect at that time. Good
citizen that he was, he duly filed a gift return.

Sadly, early this year, the wife died in childbirth.
Most of her assets, including the ring, were willed
to him. The ring was placed in a safe deposit box.

He recently became engaged to his late wife's sister,
who, for sentimental reason, requested that she be
given her late sister's ring. He was more than
willing to comply.

Query: Must he file a second gift return for the same
ring?

Bill

<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >