What statements about the filing of donor's tax are correct if it involves multiple donees?

What statements about the filing of donor's tax are correct if it involves multiple donees?

• A. Each donee must file separately regardless of donor’s wishes.
• B. The donor can choose to file all donations under one return.
• C. Separate returns are only required for gifts above a certain amount.
• D. All donations must be recorded in a single return.

Answer: (B)

When a donor makes gifts to multiple donees, the correct approach is for the donor to choose to file all donations under one return. This is permissible under tax law, allowing the donor to consolidate the information related to the gifts made to various donees into a single tax return. This can simplify the administration process for the donor. This approach is advantageous because it reduces paperwork and the complexity involved in filing separate returns for each donee, which can be particularly beneficial when the gifts are of smaller amounts that do not exceed the annual exclusion limit. In contrast, separate filing for each donee is unnecessary if the donor opts for a unified report of all gifts made during the year. This flexibility in filing helps streamline the tax compliance process for donors.

When a donor makes gifts to multiple donees, the correct approach is for the donor to choose to file all donations under one return. This is permissible under tax law, allowing the donor to consolidate the information related to the gifts made to various donees into a single tax return. This can simplify the administration process for the donor.

This approach is advantageous because it reduces paperwork and the complexity involved in filing separate returns for each donee, which can be particularly beneficial when the gifts are of smaller amounts that do not exceed the annual exclusion limit.

In contrast, separate filing for each donee is unnecessary if the donor opts for a unified report of all gifts made during the year. This flexibility in filing helps streamline the tax compliance process for donors.