Question

Stacey inherits unimproved land (fair market value of $6 million) from her father on June 1, 2019. She disclaims her interest in the property as follows: one-third on December 1, 2019; one-third on January 3, 2020; and the remaining one-third on May 31, 2020. In all cases, the disclaimers pass the interest to her son (the next heir under state law). The Federal gift tax applies to Stacey for:

Answer 1

Answer:

The disclaimer made on May 31, 2018.

Explanation:

IRS Section 2518(b) regarding Estate and Gift Taxes states:

"A taxpayer may make a qualified disclaimer no later than 9 months after the date on which the transfer creating the interest is made, or the date the person attains age 21."

Since Stacey's interest was created on June 1, 2019, the 9 month grace period ended on March 1, 2020. Therefore the last disclaimer made on May 31, 2020, will be subject to federal gift taxes.