Gift tax compliance is the process of following federal and applicable state rules when transferring wealth during life. It includes identifying which transfers are taxable gifts, applying the annual exclusion only to present-interest gifts, documenting valuation and discounts, coordinating spousal gift-splitting, and deciding whether to allocate generation-skipping transfer (GST) exemption.Proper compliance requires timely filing of Form 709 when needed, using adequate disclosure to start the statute of limitations, and preserving records that support appraisals, elections, and donor intent. Compliance also aligns gifts with the overall estate plan so lifetime transfers, beneficiary designations, insurance ownership, and trust structures work together without creating unintended estate inclusion or avoidable tax.

Advisors coordinate appraisals, draft transfer documents, and file Form 709 with adequate disclosure. They track annual-exclusion usage, structure Crummey powers for trust gifts, consider gift-splitting, and decide whether to allocate GST exemption. Checklists and calendars prevent missed filings. Documenting valuations and elections creates a defensible record for future estate administration and audits.