Regarding whether the spouse needs to file a separate gift tax return the 709 instruction also seem to state that it's not required under one of two conditions:
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When the Consenting Spouse Must Also File a Gift Tax Return
In general, if you and your spouse elect gift splitting, then both spouses must file their own individual gift tax return. However, only one spouse must file a return if the requirements of either of the exceptions below are met. In these exceptions, gifts means transfers (or parts of transfers) that do not qualify for the political organization, educational, or medical exclusions.
Exception 1. During the calendar year:
• Only one spouse made any gifts,
• The total value of these gifts to each third-party donee does not exceed $32,000, and
• All of the gifts were of present interests.
Exception 2. During the calendar year:
• Only one spouse (the donor spouse) made gifts of more than $16,000 but not more than $32,000 to any third-party donee,
• The only gifts made by the other spouse (the consenting spouse) were gifts of not more than $16,000 to third-party -6- Instructions for Form 709 (2022) donees other than those to whom the donor spouse made gifts, and
• All of the gifts by both spouses were of present interests.
If either of the above exceptions is met, only the donor spouse must file a return and the consenting spouse signifies consent on that return.
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The instructions also state "Contributions to QTPs do not qualify for the education exclusion."
So the way I'm reading this, if one spouse makes the 529 contribution (QTP) and it's upto the maximum limit for a couple ($32,000 in 2022), only one spouse would need to file the return with the Gift splitting option checked.
Am I misreading the exception clause in the instructions?
IF, they are selecting a "superfunding" scenario, $170,000 over 5 years (Schedule A part B checked, the amount per year filled in Column D and F would be $34,000 and Column G and H would be $17,000)
Then the 709 form instructions in Line B QTP programs (5 year election) goes on to say:
"If you are electing gift splitting, apply the gift-splitting rules before applying the QTP rules. Each spouse would then decide individually whether to make this QTP election."
In this case, how would the spouse select gift splitting? Would each spouse file a gift tax return with both selecting Gift Splitting (and file in the same envelope)? Wouldn't it be easier to each spouse to just file a separate 709 form without any gift splitting? This part is very confusing when combining QTP 5 year election with gift splitting (or not)!
