Q: You gave a hilarious presentation to our group about Christmas as seen through the eyes of an attorney, given modern-day laws. I especially liked your take on Santa Claus, Rudolph, and the elves. Please share some of your observations since Christmas is only a month away.

A: Let's focus upon the practice of gifting, on which I have written before. But I will tone down this column and try to be more professional. I hope I do not disappoint you.

In order to have made a gift, there has to be an intent to do so, plus a transfer of possession of the gift in such a way so that it cannot be legally taken back by the giver. Also, any conditions that attach must be met. Let's review some Holiday fact patterns to see how the rule might be applied.

If you find your hidden gift before Christmas, opening the present probably would not make it your property. The intent to give it to you may be clear, but the giver always retained the power to not follow through or maybe change gifts at the last minute. (Thus, the old legal chestnut that "possession is nine- tenths of the law" would not carry the day.)

Even if the present was under the tree, the same rationale would more than likely apply. Opening your present early probably would fail to transfer ownership since the intent was to transfer control on Christmas Eve or Christmas morning, depending on your family tradition. (Remember, Santa's watching to see if you are naughty or nice.)

But once you open your present and control transfers, then the gift is yours. The giver cannot change his or her mind, even though physically he or she could yank it back (again another old chestnut of "might makes right" as practiced in many families would not legally carry the day).

However, there might be one recourse. If you know the exact nature of the gift, e.g., the giver told you, and you changed your legal position to your detriment in reliance thereon, and it was reasonable for you to do so, then the rules of contract might be used to force the transferor to follow through.

So much for the legal right to keep a gift. But often the tax implication of a gift can be even more of a concern. Technically, except between spouses, one person cannot give more than $11,000 of value to another during the entire calendar year. Thus, if all those transfers, plus the value of this gift, exceeds $11,000, the giver must pay gift tax on the excess value at a combined federal and state rate of about 43%. The receiver does not have to pay gift tax nor include the value of the gift on his or her income tax return.

However, a properly filed gift tax return would prevent actual tax money from being paid by the giver. Such a person would merely deduct the excess amount from his or her overall uniform exemption (further explanation can be for a future column).

Gifting property that could appreciate rapidly in the future might be a good idea, but gifting appreciated property may not be wise. Although the receiver does not pay any tax upon receiving the property, at a subsequent sale the giftee does get the giftor's basis for capital gain purposes so that both the giver and the receiver have the same tax treatment.

By way of illustration, let's say a gift has a value of $11,000 but a zero basis. No tax is due from either party. If the receiver then sold the gift and $11,000 gain was recognized, the receiver pays approximately $2200 in taxes. Note the true gift was not the $11,000 that was given but $8800, so the maximum gift was not made. That's why gifting heavily appreciated property is not the most efficient way of transferring assets.

Another rule of thumb is to never gift something of value such as stock, real estate, etc. (something needing a legally binding signature) to a minor. Such gifts need to be made to trusts or in such a way that a custodian or guardian has the legal right to deal with the property. Otherwise, a conservatorship through the courts would be needed.

I need to stop because I am out of space. But I hope you get lots of gifts, have a great Holiday season, and remember "never look a gift horse in the mouth."