For anyone who did any asset protection planning in 2010 — If you made a gift of more than $13,000 to anyone other than your spouse, you are required to file a federal gift tax return to report the gift(s). The filing is made on IRS Form 709. A gift tax return for gifts made during 2010 is due by April 15, 2011.
Assets are frequently transferred from one person to another in connection with asset protection planning, and also in connection with routine estate planning. It is very important to remember that a gift tax return may be required in connection with such transfers. If you transfer assets worth more then $13,000 to anyone other than your spouse for no consideration (that is, as a gift), you probably have to file a Form 709. You will not owe any tax if you are simply applying the amount of the gift to your lifetime federal exemption. That amount (which is now a unified federal estate, gift and generation-skipping transfer exemption) has been increased to $5 million for 2011 and 2012. Gift tax will be due once you have used up your applicable lifetime federal exemption.
This post is just a very brief overview of gift tax filing requirements. It is certainly not a complete summary of all requirements. If you made a gift to anyone of more than $13,000 in 2010, you should consult with your tax advisor to determine whether a gift tax return is required.