Legal Question in Tax Law in Illinois

A gift tax return may have been required for the 2002 transfer, but no gift tax would have been payable until total lifetime transfers exceeded $700,000 due to something called the unified credit. The gift would have been the value transferred in 2002--the equity interest transferred in excess of the first $11,000 per donee recipient. It is possible that the parent really intended to treat the joint tenancy arrangement as an informal trust, not really intending the gift to take place until the parent's death, which would make the transfer not a gift of a present interest in the property in 2002. For deaths occurring in 2013, the first $5,250,000 in value transferred by occasion of death is not taxable. Unless the parent's estate was substantial, there's probably no offense against the taxation system. Whether the death occurring in 2013 was the death of the first parent or the second to die should be considered. Your tax preparer can probably help you determine if you need additional professional assistance in addressing your situation. You should make sure you have an understanding of "basis" in the context of gifts to make sure you anticipate how taxable gain will be calculated upon the disposition of the property.