"Taxlover" <taxlover[at]yahoo.com> wrote:

- quote -

I'm interested in the details. Without them it sounds like a pretty
screwy way to do estate planning and portfolio diversification.

- quote -

Again, it depends on the background facts. Technically a gift tax
return is not necessary. But if you are doing something that's not
quite legitimate and you want the statute of limitations to start
running on the IRS's ability to audit you later, filing gift tax
returns might be helpful.

- quote -

Whether it's a trade (in which you might incur income tax) or a gift,
liquidating and reinvesting is probably unnecessary to the legal issue
you are addressing, so you should decide on whether to do that
separately.

Stu

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I will spare you the details on why I want to do this, but I want to give my
wife a brokerage account in my name and take one from her. (has to do with
estate taxes and portfolio diversification...)

My accountant says I have to file gift tax returns for these, eventhough
they are not taxable, to document how we came to have them.

This seems silly to me, but that doesn't mean it isn't necessary. Whatcha
think?

Obviously we could just liquidate them and reinvest to simulate a trade, but
I expect the transaction fees will cost more than the tax returns.

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<< ------------------------------------------------------- > << 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. > << ------------------------------------------------------- >