Gift Tax Form 709 - Reporting Prior Gifting

[Romper]

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

[M-MTax]

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.

https://www.puritas-springs.com/product-category/federal

[Romper]

Thanks but if you read the question, it's which amount is to be reported?

[Romper]

I am using the software you are referring to. Good but not specific with this question.

[M-MTax]

You'd be entering the $46,000 on Line 1 of Part 2.

[Romper]

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.

[M-MTax]

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.

[Romper]

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.

[M-MTax]

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?

https://www.youtube.com/watch?v=5Z_28sVOrTY

https://www.youtube.com/watch?v=a5wJow5h-No

[Romper]

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.

[M-MTax]

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).

[Romper]

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

https://www.youtube.com/watch?v=5Z_28sVOrTY 

[M-MTax]

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.

[Romper]

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

[Romper]

OOPS I didn't see your total reply until I scrolled down.

I see you are in agreement.  

Thanks