In the case of multiple gifts on the same date, how should a donor proceed regarding tax returns?

In the case of multiple gifts on the same date, how should a donor proceed regarding tax returns?

• A. File one return for all gifts
• B. File separate returns for each gift
• C. No return is required
• D. Only report the largest gift

Answer: (B)

When a donor makes multiple gifts on the same date, the appropriate procedure is to file separate returns for each gift that exceeds the annual exclusion limit. This is because, for tax purposes, each gift is considered distinct and must be reported individually if it qualifies as a taxable gift. The annual exclusion amount per recipient allows donors to give a certain value without incurring gift tax or the obligation to file a gift tax return. If any of the individual gifts exceed this limit, then those gifts need to be reported separately to provide accurate information to the IRS. This ensures that the IRS has a clear understanding of each transaction and can correctly assess any potential gift tax liability. Thus, separate returns allow for precise documentation of each gift's value and the identity of each recipient.

When a donor makes multiple gifts on the same date, the appropriate procedure is to file separate returns for each gift that exceeds the annual exclusion limit. This is because, for tax purposes, each gift is considered distinct and must be reported individually if it qualifies as a taxable gift.

The annual exclusion amount per recipient allows donors to give a certain value without incurring gift tax or the obligation to file a gift tax return. If any of the individual gifts exceed this limit, then those gifts need to be reported separately to provide accurate information to the IRS.

This ensures that the IRS has a clear understanding of each transaction and can correctly assess any potential gift tax liability. Thus, separate returns allow for precise documentation of each gift's value and the identity of each recipient.