Legal Question in Tax Law in California

Since the $100,000 is more than the annual gift tax exclusion of $13,000, she should file a gift tax return (Form 709) for the gift. There would be no immediate tax implications, because this is just a reporting requirement.

The tax implications, if any, would arise if she exceeded her lifetime gift tax exemption (the amount that she can give away throughout her whole life, including at death), currently $5 million for 2011. At that time, a tax would be imposed on the amounts that exceed the exemption, and the tax rate is 35%.