Reporting prior gifting on Gift Tax Form 709:
For Schedule B (Gifts from Prior Periods)
I realize the final value comes from the Schedule B Worksheet.
Do I report the actual amount or the amount from Line 3 on Schedule A, Part 4 - Taxable Gift Reconciliation?
Example:
Actual gifting = $100,000
Line 3 on Schedule A, Part 4 =$100,000 - Exclusion of $54,000 = $46,000
Reason for asking is - Page 1, Part 2 Tax Computation, Line 3 states "Total Taxable Gifts" = $46,000.
Thanks in advance
Schedule B is just for gifts from prior periods, not including current year gifts (not sure if that's what you're asking).
I recommend folks trying to prepare 709s themselves use the software at the link below - well worth the $50.
Thanks but if you read the question, it's which amount is to be reported?
I am using the software you are referring to. Good but not specific with this question.
Thank you..
In my opinion, the instructions for Form 709 are poorly written and without details.
Can you point to a source that I can use for documentation? Either in the instructions or elsewhere.
Can you point to a source that I can use for documentation?
Sorry, but I actually can't because virtually none exist re the preparation of a 709. In fact, even law school courses in estate and gift taxation teach Code and Regs but not preparation of a 706 or 709.
I suggest doing a search on Youtube using the terms "709 gift tax" or something similar. I know there are at least a couple of tutorials some people have made.
Thanks for your response...
I've looked at numerous YouTube and Examples but they are hard to find or don't include the detail needed.
The Form 709 is an example of overkill and complexity.
Line 3 should include the figure from Schedule A and Schedule B. Is the software not combining those two?
You might want to contact Puritas if that's the case.
I'm presuming you filed the form in past years (or even just the past year - 2023).
Not sure this will help but have you reviewed the videos at the links below?
Yes Line 3 on Part 2, page 1 does combine the two.
I've done 709 returns for several years but never sure what to report so I've reported the full amount for prior years. Looks like a mistake but amounts are far below limits.
I have seen those YouTube videos and they are quite good. I'll study them further along with the other links on those screens.
If you haven't looked at the Puritas app for 2024, it's changed considerably. I assume it's because of the change to the Form 709 for 2024. Many pages are now in landscape mode with little detail.
I reviewed some test software several years ago but obviously not 2024.
Frankly, the professional software is not much better (it wasn't in the past either) so you're pretty much left to your own devices (plus some basic, automated calculations and worksheets).
I spent some time today reviewing the videos for Form 709 on YouTube.
If you have time, take a look at my comments in the following link you provided.
See if you agree with my comments.
It's the most recent one at the top with an M @mnphoneemail113
It looks like the guy just pulled the figures right off of the worksheet on the IRS web site (instructions for a 709).
https://www.irs.gov/instructions/i709#en_US_2024_publink1000122720
Note that the figures are cumulative on the worksheet examples and in the video the figure he made up (based on the IRS worksheet) was $10,000,000 of taxable gifts for the 2019 period (which was the current period on the worksheet).
If you entered the full amount of the value of gifts for prior periods without deducting the annual exclusions, then that was a mistake. You should have entered the taxable gifts (i.e., total gifts less exclusion). Of course, in the example, it was assumed that the taxable gift was $10,000,000.
Thanks for the feedback.
Are you agreeing that my comments are valid?
I did look at the worksheets in the instructions and saw the values for Column B for the prior gifts were all even numbers but decided that they couldn't know the Taxable Values so just used even numbers. Agree??
The other YouTube video entered the values after the exclusions.
https://www.youtube.com/watch?v=a5wJow5h-No
At 11:38
OOPS I didn't see your total reply until I scrolled down.
I see you are in agreement.
Thanks
I believe the guy (and the worksheets) just made up a figure for taxable gifts which just happened to be an even number (as you said) but that even number was after exclusions.
OOPS I didn't see your total reply until I scrolled down.
I see you are in agreement.
Yeah, and it is indeed confusing no thanks to the idiotically ambiguous and paltry instructions provided by the IRS. To be honest, the IRS has about as much of a clue as most people trying to file that form and far less than other tax pros who are familiar with it. Try to contact them and see if anyone there can provide you with a reasonable answer for any question concerning that form.
I am trying to figure out Schedule D Part 2 Line 2 - Total exemption used for periods before filing this return -
Where does this number come from?
Form 709? The GST reconciliation?
You should have that figure from previously filed 709s.
See https://www.irs.gov/instructions/i709#en_US_2024_publink16784xd0e5173
If you have skips, you really do need to consult with a local professional.
Thanks for your reply. Yes, form 709. I have filed previous 709's but have never had a skip - I've had taxable gifts that appear on Lines 1,2 and 3 of Part II of Page 1. And I have amounts from Shed B Column C and E that appear on Page 1. Still not sure if I what goes in Sched D Part 2 Line 2 - IRS instructions are not helping me.
Do you have a direct skip? Ostensibly, you haven't had one previously so Line 2 should be zero since you had not previously used any of your exemption.
You might want to look through the links below.
The link below is to 709 prep software (it's 50 bucks):
https://www.puritas-springs.com/product-category/federal
The links below are to a couple of (moderately helpful) Youtube videos.
https://www.youtube.com/watch?v=a5wJow5h-No
Thank you. Correct - never had a direct skips. I am using Puritas software for the past two years. Line 2 is not populating with any numbers - so hopefully I'm all set.
Next on the list is creating a continuation sheet for stock transfers. IRS instructions want several details on transferred stocks and there is no place on the software to put in cusip# type of stock, etc.
@brianmarks wrote:.......never had a direct skips. I am using Puritas software for the past two years. Line 2 is not populating with any numbers - so hopefully I'm all set.
Yes, that should be the case if there were no skips.
@brianmarks wrote:Next on the list is creating a continuation sheet for stock transfers. IRS instructions want several details on transferred stocks and there is no place on the software to put in cusip# type of stock, etc.
You can always attach a separate sheet with that information. All you need to do is reference the attachment (e.g., "see attached statement/sheet").