In 2019, having made no prior gifts, Don began making annual gifts to his son of $55,000. What is the first tax year for which he will have to file a gift tax return?

In 2019, having made no prior gifts, Don began making annual gifts to his son of $55,000. What is the first tax year for which he will have to file a gift tax return?

• A. 2019
• B. 2020
• C. 2021
• D. 2022

Answer: (A)

The key idea is that a gift tax return is required whenever gifts to a single recipient in a given year exceed the annual exclusion for that year. In 2019 the annual exclusion amount is 15,000. Don gave 55,000 to his son in 2019, which is 40,000 over the exclusion. That triggers reporting for that year, so the first tax year to file a gift tax return is 2019. The return itself is typically due in the following year (April 15, 2020), but the year of reporting is 2019.

The key idea is that a gift tax return is required whenever gifts to a single recipient in a given year exceed the annual exclusion for that year. In 2019 the annual exclusion amount is 15,000. Don gave 55,000 to his son in 2019, which is 40,000 over the exclusion. That triggers reporting for that year, so the first tax year to file a gift tax return is 2019. The return itself is typically due in the following year (April 15, 2020), but the year of reporting is 2019.