Are gifts to married spouses combined for tax calculation purposes?

[tax20180221t0334]

Last year, I gave a gift to a married couple, the total sum of which was larger than the $14,000 per-person exclusion amount. However, the gift was given in separate installments, with roughly half of the total sent to a checking account in the name of one spouse, and the other half sent via PayPal to the other spouse. (I do not know how or whether the gift installments were transferred/routed after having been sent.)

• For tax purposes, is this gift considered to be a single gift to the couple, greater than $14,000, and therefore taxable? Or is it considered to be two separate gifts, one to each spouse, each within the $14,000 exclusion limit?
• Am I required to file a Form 709 to report the gift?
• Does the filing status of the recipient couple (i.e. single or filing jointly) factor into the answer in any way?

[MaryK1 · Accepted solution]

For 2019 gift tax purposes, you can use the annual exclusion for EACH spouse so you are correct that you alone can gift $30,000 total.  Their tax filing status of the gift recipients does not make a difference.   

[SteveCW]

Would this be true even if the gifts were not divided out as in the above question? I gave my parents an $18k gift in a single payment, without specifying one or the other individual parent as the recipient. Should I complete a gift tax form (because the gift exceeds $15k) or is it not necessary (because the gift was to two recipients, and was below $15k + $15k)? Appreciate the help.

[JotikaT2]

No.

As long as you can show your intent that the gift was for both of your parents, each parent would be able to receive $15,000 each from you without generating any need for a gift tax return.  Therefore, you are still good as the total gift of $18,000 would still be $9,000 per parent.  

[koreman81]

Is a married couple giving a gift to another married couple limited to 30k for the total gift amount?  Or could they gift more because it is based on individual gifts rather than the tax filing status of each?

[xmasbaby0]

@koreman81 If you are a married couple giving a gift to a married couple, you can individually give each person $15,000 each, for a total of up to $60,000 without having to prepare a Form 709 gift tax form.

GIFTS

Money that you receive as a gift is not taxable income to you, and you do not need to report it on your income tax return.  Money that you gave as a gift to someone else is not deductible for your taxes.

Turbo Tax does not support the gift tax form 709, but here is a link:

https://www.irs.gov/pub/irs-pdf/f709.pdf

https://turbotax.intuit.com/tax-tips/estates/the-gift-tax-made-simple/L5tGWVC8N

https://www.forbes.com/sites/ashleaebeling/2017/10/19/irs-announces-2018-estate-and-gift-tax-limits-...

[Texas Roger]

The limit is $15,000 per person for each spouse of a married couple. So a married couple could give a total of $60,000 to another married couple without needing to file a gift tax return. Even if you exceed the limit and are required to file the gift tax return form 709, you will not owe any taxes. All that does is reduce the lifetime exclusion amount to the amount less the amount over the limit. The lifetime exclusion limit for 2020 is $11.58 million per person. 

[Anonymous]

Hi,

To your point about the intent, how can I show my intent that the gift was for both of my parents? Do I need to prove anything to the IRS?

I am in a similar situation. During 2020, I gave a total of $30k to my parents living abroad. The money was sent to my dad's bank account, but the money was intended to be used by both mom and dad. I made two separate transfers ($10k and $20k, both to my dad's bank account). Based on this answer, I may not need to file Form 709, but I want to confirm to avoid any potential penalty.  

Any help is greatly appreciated! Thanks a lot! 

[ErnieS0]

@Anonymous You do not have to file a gift tax return. For 2018, 2019, 2020 and 2021, the annual exclusion is $15,000 per person.

There is no proof required of a gift. You may want create a document recording the amount of the gift, date and value, e.g. you could send your parents a letter specifying that amount you gave to each and retain a copy for yourself.

[flyer56a]

I made an international wire transfer of 26k$ (without splitting it) to my foreign relative and in the wire transfer request form to the bank i stated "family support" but not a gift. Do i need to file the form 709?