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Form 709

Home Estate Planning Form 709

  • ENT Doc ENT Doc 
    Participant
    Status: Physician
    Posts: 3524
    Joined: 01/14/2017

    For those who fill out Form 709 to show the IRS that 529 gifts were indeed split between you and your spouse, I had a question about the Scedule A section of the form. Say you gave one child $20k for their 529 as a combined gift. In the first section of schedule A do you put the $20k down under “Gifts Made by Spouse” as well? The instructions were a little unclear on this. The gift is being split, but the form also states “…and he/she also made gifts”. Is the $20k considered then to also be a gift given by the spouse? If so, under what conditions would it be split and NOT also be deemed a gift given by the spouse? Thanks!

    https://www.irs.gov/pub/irs-pdf/f709.pdf

    #117645 Reply
    The White Coat Investor The White Coat Investor 
    Keymaster
    Status: Physician
    Posts: 4551
    Joined: 05/13/2011

    I’m lost as to why you’re filling out Form 709 when neither of you made a > $14K gift?

    Who Must File
    In general. If you are a citizen or resident
    of the United States, you must file a gift tax

    return (whether or not any tax is ultimately
    due) in the following situations.
    If you gave gifts to someone in 2017
    totaling more than $14,000 (other than to
    your spouse), you probably must file Form
    709

    https://www.irs.gov/pub/irs-pdf/i709.pdf

    Are you sure you even need to fill this out?

    Site/Forum Owner, Emergency Physician, Blogger, and author of The White Coat Investor: A Doctor's Guide to Personal Finance and Investing
    Helping Those Who Wear The White Coat Get A "Fair Shake" on Wall Street since 2011

    #117728 Reply
    jfoxcpacfp jfoxcpacfp 
    Moderator
    Status: Financial Advisor, Accountant, Small Business Owner
    Posts: 8153
    Joined: 01/09/2016

    If you made the gift and are electing gift splitting with your spouse, you must file a gift tax return. See the section labeled When the Consenting Spouse Also Must File a Gift Tax Return to determine if you file only 1 gift tax return or 2. In your situation, it appears that you should file only 1 and your spouse should sign to indicate consent.

    Johanna Fox Turner, CPA, CFP, Fox Wealth Mgmt & Fox CPAs ~
    http://www.fox-cpas.com/for-doctors-only ~ [email protected]

    #117733 Reply
    ENT Doc ENT Doc 
    Participant
    Status: Physician
    Posts: 3524
    Joined: 01/14/2017
    Earnest refinancing bonus

    If you made the gift and are electing gift splitting with your spouse, you must file a gift tax return. See the section labeled When the Consenting Spouse Also Must File a Gift Tax Return to determine if you file only 1 gift tax return or 2. In your situation, it appears that you should file only 1 and your spouse should sign to indicate consent.

    Click to expand…

    Thank you.  So I still have a question as it pertains to a combined gift.  The exception to both people needing to file states that only one spouse made any gifts.  The gift was a combined gift from our combined checking account.  Is it accurate to say that “only one spouse made a gift” then?  Am I just simplifying things and stating that – yes – the gift was from me personally but we’ve agreed to split it?  This was my original point of confusion with the Schedule A where it says under combined gifts to put if you are splitting AND the spouse ALSO gave gifts.

    #117735 Reply
    jfoxcpacfp jfoxcpacfp 
    Moderator
    Status: Financial Advisor, Accountant, Small Business Owner
    Posts: 8153
    Joined: 01/09/2016

    Ah! Then in this situation, I see no need to file a 709 because the gifts from each of you were < $14k. Gift splitting would come into play if the check had come from you only and your spouse is joining in

    Johanna Fox Turner, CPA, CFP, Fox Wealth Mgmt & Fox CPAs ~
    http://www.fox-cpas.com/for-doctors-only ~ [email protected]

    #117738 Reply
    Liked by spiritrider
    ENT Doc ENT Doc 
    Participant
    Status: Physician
    Posts: 3524
    Joined: 01/14/2017

    Ah! Then in this situation, I see no need to file a 709 because the gifts from each of you were < $14k. Gift splitting would come into play if the check had come from you only and your spouse is joining in

    Click to expand…

    Oh, ok.  So no need to play it safe for IRS purposes?  I didn’t think I *needed* to file based on the instructions, but thought I’d play it safe.  To be clear, we donated <$28k to each of our (2) children’s 529, both as combined gifts from our joint checking.

    #117744 Reply
    jfoxcpacfp jfoxcpacfp 
    Moderator
    Status: Financial Advisor, Accountant, Small Business Owner
    Posts: 8153
    Joined: 01/09/2016

    So you gave $20k to each child? Probably no need in that situation if those were the only large gifts during the year. If you gave $28k to each child in 2017, then you might want to consider the 709 because you probably gave >$14k/child/year when including other gifts such as Christmas. However, my guess is that most people don’t do so.

    I’d really like to see what @spiritrider has to say about it…yoo-hoo!!!

    Johanna Fox Turner, CPA, CFP, Fox Wealth Mgmt & Fox CPAs ~
    http://www.fox-cpas.com/for-doctors-only ~ [email protected]

    #117754 Reply
    Avatar spiritrider 
    Participant
    Status: Small Business Owner
    Posts: 1912
    Joined: 02/01/2016

    Johanna is correct. A Form 709 is only required to report gift splitting, i.e the gift came from individual assets. If the gift comes from joint assets, no Form 709 is required since there is nothing to report.

    She is also technically correct about making monetary gifts of exactly the annual exclusion. However, I can’t even imagine the number of people who will gift $15K this year including the much smaller but still significant number of individuals/couples who will do a $75K/$150K five-year contribution to a 529.

    Realistically, I don’t think the IRS could be bothered with any incidental additional gifts you would make. Even if those gifts to your children would then cause you the exceed the annual exclusion.

    I am usually a stickler for following both the spirit and letter of tax rules. This is one case where I have no problem with people gifting exactly the annual exclusion. Then not filing a 709 unless they made significant additional gifts.

    #117778 Reply
    ENT Doc ENT Doc 
    Participant
    Status: Physician
    Posts: 3524
    Joined: 01/14/2017

    Appreciate the help y’all!

    #117784 Reply
    Hank Hank 
    Moderator
    Status: Attorney
    Posts: 1411
    Joined: 03/27/2017

    Sorry Billy, I’d love to give you ten bucks to buy an ice-cream cone or a souvenir at Disneyland, but your mom and I already front loaded your 529.  Ask me again in five years. 😀

    #117825 Reply

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