<html><body><span style="font-family:Times New Roman; color:#000000; font-size:12pt;"><div><span class="mceItemHidden">Susan/anyone, </span></div><div><span class="mceItemHidden">It seems that the posts talked about whether the gift was reported on a tax return but seem to question whether a gift of under 15k needs to be reported anywhere? I thought that there is a form for this, no?</span></div><div><span class="mceItemHidden">Thanks</span></div><div><span class="mceItemHidden">Mike</span></div><div><img id="sigimg0" title="signature image" src="cid:sigimg0@7d37be1fbe181df3c1fc296f3b8cfba1" border="0" alt=""></div><div><br><br></div><span class="mceItemHidden">
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Subject: Re: [<span class="mceItemHiddenSpellWord">WSBAPT</span>] large gifts of appreciated stock</span><br><span class="mceItemHidden">
to charities in estate planning</span><br><span class="mceItemHidden">
From: "Susan Donahue" <<a href="mailto:sdonahue@sdonahuelaw.com">sdonahue@sdonahuelaw.com</a>></span><br><span class="mceItemHidden">
Date: Fri, May 15, 2020 4:19 pm</span><br><span class="mceItemHidden">
To: "'WSBA Probate & Trust Listserv'" <<a href="mailto:wsbapt@lists.wsbarppt.com">wsbapt@lists.wsbarppt.com</a>></span><br><span class="mceItemHidden">
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</span></style><div class="WordSection1"><div class="MsoNormal" style="font-size:12pt;"><span class="mceItemHidden">I didn’t mean that the gifts have to be reported by the recipients. I totally agree with this. But reported by the <span class="mceItemHiddenSpellWord">gifter</span> on federal income tax so that the amount gifted can be deducted from the gifter’s estate upon death so as to possibly reduce the taxable estate and escape Washington estate taxes. But the gifts reported on the gifter’s federal income tax have no effect on it. It is just a record of lifetime gifts that will allow the Washington estate tax to be lowered. In my understanding, which could be incorrect, when the gifts are given, up to $15,000 in any year to an individual, a form is submitted with the gifter’s federal income tax and then at death the estate may deduct these lifetime gifts from the gross estate to reduce it so that Washington estate taxes may not have to be paid, depending upon the amounts. Perhaps I am not perfectly clear about this.</span><o:p></o:p></div><div class="MsoNormal" style="font-size:12pt;"><o:p><span class="mceItemHidden"> </span></o:p></div><div class="MsoNormal" style="font-size:12pt;"><span class="mceItemHidden">I apologize if I’ve been unclear. </span><o:p></o:p></div><div class="MsoNormal" style="font-size:12pt;"><o:p><span class="mceItemHidden"> </span></o:p></div><div class="MsoNormal" style="font-size:12pt;"><span class="mceItemHidden">Susan</span><o:p></o:p></div><div class="MsoNormal" style="font-size:12pt;"><o:p><span class="mceItemHidden"> </span></o:p></div><div><div style="border:none;border-top:solid #E1E1E1 1.0pt;padding:3.0pt 0in 0in 0in"><div class="MsoNormal" style="font-size:12pt;"><b><span class="mceItemHidden">From:</span></b><span class="mceItemHidden"> <a href="mailto:wsbapt-bounces@lists.wsbarppt.com">wsbapt-bounces@lists.wsbarppt.com</a> <<a href="mailto:wsbapt-bounces@lists.wsbarppt.com">wsbapt-bounces@lists.wsbarppt.com</a>> </span><b><span class="mceItemHidden">On Behalf Of </span></b><span class="mceItemHidden">Philip N. Jones</span><br><b><span class="mceItemHidden">Sent:</span></b><span class="mceItemHidden"> Friday, May 15, 2020 3:21 PM</span><br><b><span class="mceItemHidden">To:</span></b><span class="mceItemHidden"> <span class="mceItemHiddenSpellWord">WSBA</span> Probate & Trust <span class="mceItemHiddenSpellWord">Listserv</span> <<a href="mailto:wsbapt@lists.wsbarppt.com">wsbapt@lists.wsbarppt.com</a>></span><br><b><span class="mceItemHidden">Subject:</span></b><span class="mceItemHidden"> Re: [<span class="mceItemHiddenSpellWord">WSBAPT</span>] large gifts of appreciated stock to charities in estate planning</span><o:p></o:p></div></div></div><div class="MsoNormal" style="font-size:12pt;"><o:p><span class="mceItemHidden"> </span></o:p></div><div class="MsoNormal" style="font-size:12pt;"><span class="mceItemHidden">That is not correct. Gifts are not income and should never be reported on a federal income tax return. And Washington does not have an income tax. </span><o:p></o:p></div><div><div class="MsoNormal" style="font-size:12pt;"><span class="mceItemHidden">And lifetime gifts are not part of the gross estate and need not be deducted on the Washington estate tax return. The money is already gone before the date of death.</span><o:p></o:p></div><div><div class="MsoNormal" style="font-size:12pt;margin-bottom:12.0pt"><span class="mceItemHidden">Phil Jones </span><o:p></o:p></div><div><div class="MsoNormal" style="font-size:12pt;"><span class="mceItemHidden">Philip N. Jones </span><o:p></o:p></div><div><div class="MsoNormal" style="font-size:12pt;"><span class="mceItemHidden">Duffy <span class="mceItemHiddenSpellWord">Kekel</span> <span class="mceItemHiddenSpellWord">LLP</span></span><o:p></o:p></div></div><div><div class="MsoNormal" style="font-size:12pt;"><span class="mceItemHidden">Portland, OR</span><o:p></o:p></div></div><div><div class="MsoNormal" style="font-size:12pt;"><a target="_blank" href="mailto:pjones@duffykekel.com"><span class="mceItemHidden">pjones@duffykekel.com</span></a><o:p></o:p></div></div><div><div class="MsoNormal" style="font-size:12pt;"><span class="mceItemHidden">(503) 226-1371</span><o:p></o:p></div></div></div><div><div class="MsoNormal" style="font-size:12pt;"><br><br><o:p></o:p></div><blockquote style="margin-top:5.0pt;margin-bottom:5.0pt"><div class="MsoNormal" style="font-size:12pt;margin-bottom:12.0pt"><span class="mceItemHidden">On May 15, 2020, at 3:13 PM, Susan Donahue <</span><a target="_blank" href="mailto:sdonahue@sdonahuelaw.com"><span class="mceItemHidden">sdonahue@sdonahuelaw.com</span></a><span class="mceItemHidden">> wrote:</span><o:p></o:p></div></blockquote></div><blockquote style="margin-top:5.0pt;margin-bottom:5.0pt"><div><div class="MsoNormal" style="font-size:12pt;"><span class="mceItemHidden"> </span><o:p></o:p></div><div class="MsoNormal" style="font-size:12pt;"><span class="mceItemHidden">Ok. Thank you for the clarification. But I thought that the $15,000 maximum annual gifts to individuals had to be reported on Wash income tax so that they could be deducted from her gross estate at death. I’ll see if I can speak with her tax accountant.</span><o:p></o:p></div><div class="MsoNormal" style="font-size:12pt;"><span class="mceItemHidden"> </span><o:p></o:p></div><div class="MsoNormal" style="font-size:12pt;"><span class="mceItemHidden">Susan</span><o:p></o:p></div><div class="MsoNormal" style="font-size:12pt;"><span class="mceItemHidden"> </span><o:p></o:p></div><div><div style="border:none;border-top:solid #E1E1E1 1.0pt;padding:3.0pt 0in 0in 0in"><div class="MsoNormal" style="font-size:12pt;"><b><span class="mceItemHidden">From:</span></b> <a target="_blank" href="mailto:wsbapt-bounces@lists.wsbarppt.com"><span class="mceItemHidden">wsbapt-bounces@lists.wsbarppt.com</span></a><span class="mceItemHidden"> <</span><a target="_blank" href="mailto:wsbapt-bounces@lists.wsbarppt.com"><span class="mceItemHidden">wsbapt-bounces@lists.wsbarppt.com</span></a><span class="mceItemHidden">> </span><b><span class="mceItemHidden">On Behalf Of </span></b><span class="mceItemHidden">Philip N. Jones</span><br><b><span class="mceItemHidden">Sent:</span></b><span class="mceItemHidden"> Friday, May 15, 2020 2:47 PM</span><br><b><span class="mceItemHidden">To:</span></b><span class="mceItemHidden"> <span class="mceItemHiddenSpellWord">WSBA</span> Probate & Trust <span class="mceItemHiddenSpellWord">Listserv</span> <</span><a target="_blank" href="mailto:wsbapt@lists.wsbarppt.com"><span class="mceItemHidden">wsbapt@lists.wsbarppt.com</span></a><span class="mceItemHidden">></span><br><b><span class="mceItemHidden">Subject:</span></b><span class="mceItemHidden"> Re: [<span class="mceItemHiddenSpellWord">WSBAPT</span>] large gifts of appreciated stock to charities in estate planning</span><o:p></o:p></div></div></div><div class="MsoNormal" style="font-size:12pt;"><span class="mceItemHidden"> </span><o:p></o:p></div><div class="MsoNormal" style="font-size:12pt;"><span class="mceItemHidden">The lifetime charitable gifts are no longer part of her estate once they are made, so her estate need not worry about deducting them on an estate tax return. But she should be deducting them on her federal income tax return. </span><o:p></o:p></div><div><div class="MsoNormal" style="font-size:12pt;"><span class="mceItemHidden">The same is true of gifts to individuals, except they are not deductible on her income tax returns.</span><o:p></o:p></div></div><div><div class="MsoNormal" style="font-size:12pt;"><span class="mceItemHidden">Whether these gifts were or were not reported on gift tax returns does not change these answers.</span><o:p></o:p></div></div><div><div class="MsoNormal" style="font-size:12pt;"><span class="mceItemHidden">These answers are the same in both Washington and Oregon.</span><o:p></o:p></div></div><div><div class="MsoNormal" style="font-size:12pt;"><span class="mceItemHidden">Phil Jones</span><o:p></o:p></div></div><div><div><div class="MsoNormal" style="font-size:12pt;margin-bottom:12.0pt"><span class="mceItemHidden"> </span><o:p></o:p></div><div><div class="MsoNormal" style="font-size:12pt;"><span class="mceItemHidden">Philip N. Jones </span><o:p></o:p></div><div><div class="MsoNormal" style="font-size:12pt;"><span class="mceItemHidden">Duffy <span class="mceItemHiddenSpellWord">Kekel</span> <span class="mceItemHiddenSpellWord">LLP</span></span><o:p></o:p></div></div><div><div class="MsoNormal" style="font-size:12pt;"><span class="mceItemHidden">Portland, OR</span><o:p></o:p></div></div><div><div class="MsoNormal" style="font-size:12pt;"><a target="_blank" href="mailto:pjones@duffykekel.com"><span class="mceItemHidden">pjones@duffykekel.com</span></a><o:p></o:p></div></div><div><div class="MsoNormal" style="font-size:12pt;"><span class="mceItemHidden">(503) 226-1371</span><o:p></o:p></div></div></div><div><div class="MsoNormal" style="font-size:12pt;"><br><br><br><o:p></o:p></div><blockquote style="margin-top:5.0pt;margin-bottom:5.0pt"><div class="MsoNormal" style="font-size:12pt;margin-bottom:12.0pt"><span class="mceItemHidden">On May 15, 2020, at 2:04 PM, Susan Donahue <</span><a target="_blank" href="mailto:sdonahue@sdonahuelaw.com"><span class="mceItemHidden">sdonahue@sdonahuelaw.com</span></a><span class="mceItemHidden">> wrote:</span><o:p></o:p></div></blockquote></div><blockquote style="margin-top:5.0pt;margin-bottom:5.0pt"><div><div class="MsoNormal" style="font-size:12pt;"><span class="mceItemHidden"> </span><o:p></o:p></div><div class="MsoNormal" style="font-size:12pt;"><span class="mceItemHidden">Hello everyone,</span><o:p></o:p></div><div class="MsoNormal" style="font-size:12pt;"><span class="mceItemHidden"> </span><o:p></o:p></div><div class="MsoNormal" style="font-size:12pt;"><span class="mceItemHidden">I have a client who gives large gifts of appreciated stock to charities each year. I’m not certain the effect these gifts will have on her gross estate/taxable estate at her death. Are they treated the same as $15,000 gifts to individual persons which, if the proper gift tax form is filed each year, can be deducted from the gross estate at death? I’m trying to figure out the best estate plan for her, but I’m not familiar with the effect of gifting appreciated stock to charities annually, as she does. Any thoughts would be appreciated.</span><o:p></o:p></div><div class="MsoNormal" style="font-size:12pt;"><span class="mceItemHidden"> </span><o:p></o:p></div><div class="MsoNormal" style="font-size:12pt;"><span class="mceItemHidden">Her estate is over the $2.193 million exclusion amount, but I’m not sure by how much. I am just beginning to work on this. If it is not too much over, she can have her estate just pay the 10%estate tax on the amount over $2.193 million if her estate is worth less than $3.193 million, but the tax could be a lot more than the expense of creating an irrevocable trust. I think the purpose for her to have a trust would be to shelter her estate from taxes. But how do the annual charitable gifts factor into this? I’m thinking an irrevocable trust of a certain amount of her present estate would keep her taxable estate at her death under the exclusion amount. </span><o:p></o:p></div><div class="MsoNormal" style="font-size:12pt;"><span class="mceItemHidden"> </span><o:p></o:p></div><div class="MsoNormal" style="font-size:12pt;"><span class="mceItemHidden">Any thoughts? All are appreciated.</span><o:p></o:p></div><div class="MsoNormal" style="font-size:12pt;"><span class="mceItemHidden"> </span><o:p></o:p></div><div class="MsoNormal" style="font-size:12pt;"><span class="mceItemHidden">Susan</span><o:p></o:p></div><div class="MsoNormal" style="font-size:12pt;"><span class="mceItemHidden"> </span><o:p></o:p></div><div class="MsoNormal" style="font-size:12pt;"><span class="mceItemHidden">Susan Donahue</span><o:p></o:p></div><div class="MsoNormal" style="font-size:12pt;"><span class="mceItemHidden">Law Office of Susan Donahue</span><o:p></o:p></div><div class="MsoNormal" style="font-size:12pt;"><span class="mceItemHidden">125 West 2</span><sup><span class="mceItemHidden"><span class="mceItemHiddenSpellWord">nd</span></span></sup><span class="mceItemHidden"> Avenue, Suite “B”</span><o:p></o:p></div><div class="MsoNormal" style="font-size:12pt;"><span class="mceItemHidden">P.O. Box 81</span><o:p></o:p></div><div class="MsoNormal" style="font-size:12pt;"><span class="mceItemHidden"><span class="mceItemHiddenSpellWord">Twisp</span>, WA 98856</span><o:p></o:p></div><div class="MsoNormal" style="font-size:12pt;"><span class="mceItemHidden">(509) 996-5944 (phone)</span><o:p></o:p></div><div class="MsoNormal" style="font-size:12pt;"><span class="mceItemHidden">(509) 362-9692 (fax)</span><o:p></o:p></div><div class="MsoNormal" style="font-size:12pt;"><a target="_blank" href="mailto:sdonahue@sdonahuelaw.com"><span class="mceItemHidden">sdonahue@sdonahuelaw.com</span></a><o:p></o:p></div><div class="MsoNormal" style="font-size:12pt;"><a target="_blank" href="http://www.sdonahuelaw.com"><span class="mceItemHidden">www.sdonahuelaw.com</span></a><o:p></o:p></div><div class="MsoNormal" style="font-size:12pt;"><span class="mceItemHidden"> </span><o:p></o:p></div><div class="MsoNormal" style="font-size:12pt;"><span class="mceItemHidden">***Disclaimer: Please note that <span class="mceItemHiddenSpellWord">RPPT</span> <span class="mceItemHiddenSpellWord">listserv</span> participation is not restricted to practicing attorneys and may include non-practicing attorneys, law students, professionals working in related fields, and others.***</span><br><span class="mceItemHidden">_______________________________________________</span><br><span class="mceItemHidden"><span class="mceItemHiddenSpellWord">WSBAPT</span> mailing list</span><br><a target="_blank" href="mailto:WSBAPT@lists.wsbarppt.com"><span class="mceItemHidden">WSBAPT@lists.wsbarppt.com</span></a><br><a target="_blank" href="http://mailman.fsr.com/mailman/listinfo/wsbapt"><span class="mceItemHidden">http://mailman.fsr.com/mailman/listinfo/wsbapt</span></a><o:p></o:p></div></div></blockquote></div></div><div class="MsoNormal" style="font-size:12pt;"><span class="mceItemHidden">***Disclaimer: Please note that <span class="mceItemHiddenSpellWord">RPPT</span> <span class="mceItemHiddenSpellWord">listserv</span> participation is not restricted to practicing attorneys and may include non-practicing attorneys, law students, professionals working in related fields, and others.***</span><br><span class="mceItemHidden">_______________________________________________</span><br><span class="mceItemHidden"><span class="mceItemHiddenSpellWord">WSBAPT</span> mailing list</span><br><a target="_blank" href="mailto:WSBAPT@lists.wsbarppt.com"><span class="mceItemHidden">WSBAPT@lists.wsbarppt.com</span></a><br><a target="_blank" href="http://mailman.fsr.com/mailman/listinfo/wsbapt"><span class="mceItemHidden">http://mailman.fsr.com/mailman/listinfo/wsbapt</span></a><o:p></o:p></div></div></blockquote></div></div></div><hr><span class="mceItemHidden">***Disclaimer: Please note that <span class="mceItemHiddenSpellWord">RPPT</span> <span class="mceItemHiddenSpellWord">listserv</span> participation is not restricted to practicing attorneys and may include non-practicing attorneys, law students, professionals working in related fields, and others.***</span><br><span class="mceItemHidden">
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