901 / How is a gift of property under either the Uniform Gifts to Minors Act or under the Uniform Transfers to Minors Act treated for federal gift tax purposes?

Any transfer of property to a minor under either of the Uniform Acts constitutes a complete gift for federal gift tax purposes to the extent of the full fair market value of the property transferred. Generally, such a gift qualifies for the gift tax annual exclusion (see Q 905).¹ The allowance of the exclusion is not affected by the amendment of a state’s Uniform Act lowering the age of majority and thus requiring that property be distributed to the donee at age 18.² These rulings base the allowance of the exclusion on the assumption that gifts under the Uniform Acts come within the purview of IRC Section 2503(c). Gifts to minors under IRC Section 2503(c) must pass to the donee on his attaining age 21. If a state statute varies from the Uniform Act by providing that under certain conditions custodianship may be extended past the donee’s age 21, gifts made under those conditions would not qualify for the exclusion. For tables of state laws concerning the Uniform Acts, see Appendix D.

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1.    Rev. Rul. 56-86, 1956-1 CB 449; Rev. Rul. 59-357, 1959-2 CB 212.

2.    Rev. Rul. 73-287, 1973-2 CB 321.

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