Tax Guru – Ker$tetter Letter

Helping real people win the tax game.

Gift Tax Reporting

Posted by taxguru on February 11, 2016

From a Reader:

Subject: 709 form question

Hi, If my husband and I want to both gift the max ($14000) to our child and we both write separate checks, do either of us need to file a 709 ? Thank You

 

My Reply:

As long as either of your total gifts to your child for the year, not counting the exempt types (medical & education), don’t exceed $14,000 for the calendar year, neither of you will need to file a 709.

This is important to be aware of because if you each give him/her $14,000 this early in the year, additional gifts later in the year could push the total for 2016 over the $14,000 threshold and 709s may end up being necessary.

I have attached a short flyer that explains the gifting rules in a little more detail.

Good luck.  I hope this helps.

Kerry

 

Follow-Up Q:

Hi Kerry,

   One last follow-up … Do the checks need to be written out of separate accounts that belong solely to myself and my husband ? Meaning, not joint accounts.

thanks

 

Follow-Up A:

It really doesn’t matter which accounts the money comes from.

It can all come out of a joint account and you can claim that half of the gift is made by each of you.

Likewise, all of the money can come out of a separately owned account and using the IRS approved concept of Gift Splitting, the gift can be attributed to both spouses.

I have attached more info on this from one of my main tax reference services, TheTaxBook.

I hope this into is useful.

Kerry

 

Final Q:

Thank you!  But as long as both checks are under 14k , we do not need to file the 709, is that correct?

Final Reply:

You may have missed my point from the previous email about joint gifts.

The gifts don’t have to be in separate checks or from separate accounts. 

They can be in one or a dozen checks.  All you need to worry about is that the total given to your child during the year is less than $28,000.

I hope this info helps.

Kerry

Final Comment:

Ok, thanks again !  appreciate the return !!

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