Update on “Formula Gifting”

formula giftingFor taxpayers who make gifts this year, we have been strongly recommending they consider using the “formula gifting” mechanism. The formula gifting mechanism can be used to avoid any increase in the  amount of gift tax in the event the value of the gift is challenged by the Internal Revenue Service.

This gifting process is based on the Tax Court’s Wandry v. Commissioner, T.C. Memo. 2012-88 (2012) case. Recently the IRS withdrew their appeal of the Wandry case in the 10th Circuit Court of Appeals and the case was dismissed. Continue reading