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New Member
posted Jun 1, 2019 8:21:36 AM

When filing Form 709, do I actually compute a tax amount on line 4 of Part 2-Tax Computation

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1 Best answer
Level 15
Jun 1, 2019 8:21:37 AM

"When filing Form 709, do I actually compute a tax amount on line 4 of Part 2-Tax Computation"

Yes, but then you enter the applicable credit (typically $4,417,800) on Line 7 (see instructions at link below).

If you are giving substantial gifts, you really should consider getting professional assistance, both with the amount and method of gifting and the filing of any gift tax returns that may be due. 

See https://www.irs.gov/instructions/i709#idm140297521158896

5 Replies
Level 15
Jun 1, 2019 8:21:37 AM

"When filing Form 709, do I actually compute a tax amount on line 4 of Part 2-Tax Computation"

Yes, but then you enter the applicable credit (typically $4,417,800) on Line 7 (see instructions at link below).

If you are giving substantial gifts, you really should consider getting professional assistance, both with the amount and method of gifting and the filing of any gift tax returns that may be due. 

See https://www.irs.gov/instructions/i709#idm140297521158896

New Member
Mar 4, 2021 8:13:37 AM

For 2020 Part 2-Tax Computation Line 7, why isn't the Applicable credit amount $11,580,000 (vice $4,577,800)?

Level 15
Mar 4, 2021 8:16:02 AM

The figure on the form is the amount of the credit (for the purposes of tax computation), not the lifetime exclusion.

New Member
Mar 4, 2021 8:51:53 AM

This $4,577,800 credit gets reduced by any previous taxable gift amounts (lines 8 and 10) and further reduced by the taxable amount of the gift (line 6 carried down to line 12).  The resulting tax credit balance, if any, (line 15) carries forward for use in future years?

 

I am also confused by line 17 because if you carry line 15 (the remaining future gift credit) down to line 17 it implies that this is the tax due to the IRS.

Level 2
Apr 13, 2021 1:52:30 PM

Confusion is because you appear to be doing the calculation for line 15 incorrectly.  It's the balance of how much tax you owe (which should be zero for most people), not how much you carry forward.