709 gift tax form: Citizenship and adjusted basis

[jebe]

2 questions related to Form 709. 

What should I enter in Box 7 of Form 709 when both the donor and donee are green card holders? "citizen of the United States", "nonresident not a citizen of the United States" or ...? We both are domiciled in the USA.

Also, when making a gift to my "green card" spouse in excess of $159K, it must be reported on Form 709. Should I deduct $159K of the total gift to calculate the adjusted basis of gift, or does the entire gift eat into my lifetime $11.7M?

Thank you.

[DaveF1006]

To clarify, is your spouse considered a US resident or non-resident in 2021?

[jebe]

She's a resident.

[DaveF1006]

The general rule is that any gift is a taxable gift. However, there are many exceptions to this rule. Generally, the following gifts are not taxable gifts.

1. Gifts that are not more than the annual exclusion for the calendar year.
2. Tuition or medical expenses you pay for someone (the educational and medical exclusions).
3. Gifts to your spouse.
4. Gifts to a political organization for its us.

Please read the IRS publication Frequently Asked Questions on Gift Taxes   in the section What Can be Excluded from Gifts. 

@jebe

[NJ_Devils]

What if I am a green card holder and the donee (my father) is a foreign national living outside the US.

Does the lifetime exclusion apply to me? or will I have to pay gift taxes on anything above the annual exclusion?

[Vanessa A]

Yes, if you are a Green Card holder, you are treated as a US Citizen for tax purposes.  So, the lifetime exclusion would apply to you.

[NJ_Devils]

And what should I enter in Box 7 of Form 709? The instructions on the form are very unclear.

I am not a US citizen, just a green card holder, so do I write the country whose nationality I hold? Or am I a "US citizen" for tax purposes?

[amanagg]

NJ_Devils -  Were you able to figure this out. I have the same question?