IRS Revenue Ruling 2013-17 implements the June decision by the Supreme Court that struck down parts of the Defense of Marriage Act and opened the way for federal recognition of same sex marriages. The Ruling provides that same sex couples who have been legally married in a state that permits same sex marriages (as opposed to civil unions), will be able to file their tax year 2013 returns as married-joint.
The effects of the Supreme Court decision, however, begin even even sooner than next April. The IRS has circulated its proposed 2013 Gift Tax Return. Although the current form does not address same sex marriages, it is expected that the final form will. In addition to the lifetime gift tax exception, currently at $5,250,000 and indexed to inflation, and the annual gift tax exception, currently at $14,000, there is also an unlimited exemption from gift tax for spousal gifts. That is, gifts from one spouse to another are never subject to gift tax.
The IRS Ruling applies to transactions on and after September 16, 2013, which means beginning that date, gifts between same sex spouses enjoy the spousal exemption from gift tax. Any transactions before that date will not be covered by the spousal exemption.
Horowitz Law Offices represent individuals and businesses in a variety of tax situations including Gift Tax. You are welcome to contact us with your questions at 312 787 5533 or firstname.lastname@example.org .