Sign Up

Why sign in to the Community?

  • Submit a question
  • Check your notifications
or and start working on your taxes
cancel
Showing results for 
Search instead for 
Did you mean: 
todd833
Returning Member

Can i gift $15k to my son and $15K to my wife where she uses the $15K to gift my son a total of $30K?

I would like to do this without needing to fill out the Form 709.
13 Replies
tagteam
Level 15

Can i gift $15k to my son and $15K to my wife where she uses the $15K to gift my son a total of $30K?

If the gift to your wife and then from your wife to your son is close in time, the IRS could conclude that this was a step transaction and invalidate the transfer to your wife (i.e., treat the gift as one from you directly to your son).

 

See https://www.thetaxadviser.com/issues/2021/may/step-transaction-doctrine.html

VolvoGirl
Level 15

Can i gift $15k to my son and $15K to my wife where she uses the $15K to gift my son a total of $30K?

Can't you just skip the transfer to your wife?   You each can give 15,000.  Do you have a joint bank account?  

Opus 17
Level 15

Can i gift $15k to my son and $15K to my wife where she uses the $15K to gift my son a total of $30K?

Just have your wife also gift $15,000.  Don’t get complicated.  

*Answers are correct to the best of my ability at the time of posting but do not constitute legal or tax advice.*
todd833
Returning Member

Can i gift $15k to my son and $15K to my wife where she uses the $15K to gift my son a total of $30K?

The recipient is my son, not our son. My wife and I have separate finances. 

VolvoGirl
Level 15

Can i gift $15k to my son and $15K to my wife where she uses the $15K to gift my son a total of $30K?

It doesn't matter whose son.  It can be to anyone.   You can give anyone 15,000.   

macuser_22
Level 15

Can i gift $15k to my son and $15K to my wife where she uses the $15K to gift my son a total of $30K?

Spouses can transfer money in any amounts between them at any time without any reporting requirements whatsoever - it is not considered a gift.. 

**Disclaimer: This post is for discussion purposes only and is NOT tax advice. The author takes no responsibility for the accuracy of any information in this post.**
tagteam
Level 15

Can i gift $15k to my son and $15K to my wife where she uses the $15K to gift my son a total of $30K?


@macuser_22 wrote:

Spouses can transfer money in any amounts between them at any time without any reporting requirements whatsoever - it is not considered a gift.. 


If @todd833 gives the $15,000 to his wife with the understanding that she will give the $15,000 to his son, with the intent being to avoid a filing requirement, then it comes within the purview of the step transaction doctrine, regardless.

macuser_22
Level 15

Can i gift $15k to my son and $15K to my wife where she uses the $15K to gift my son a total of $30K?


@tagteam wrote:

@macuser_22 wrote:

Spouses can transfer money in any amounts between them at any time without any reporting requirements whatsoever - it is not considered a gift.. 


If @todd833 gives the $15,000 to his wife with the understanding that she will give the $15,000 to his son, with the intent being to avoid a filing requirement, then it comes within the purview of the step transaction doctrine, regardless.


My understanding is money exchanged between spouses is not a "gift" at all but simply a transfer for funds from one spouse to the other and each spouse can do what ever they want with the money.

 

Do you have a reference for your opinion?

**Disclaimer: This post is for discussion purposes only and is NOT tax advice. The author takes no responsibility for the accuracy of any information in this post.**
todd833
Returning Member

Can i gift $15k to my son and $15K to my wife where she uses the $15K to gift my son a total of $30K?

This clearly expresses the real issue. Does the step transaction doctrine apply when one of the steps is a transfer of funds to a spouse?

tagteam
Level 15

Can i gift $15k to my son and $15K to my wife where she uses the $15K to gift my son a total of $30K?


@todd833 wrote:

Does the step transaction doctrine apply when one of the steps is a transfer of funds to a spouse?


Yes, it would be applicable to this fact pattern.

macuser_22
Level 15

Can i gift $15k to my son and $15K to my wife where she uses the $15K to gift my son a total of $30K?

I have never heard of this being applied to spouses  giving to children because 1; transactions between spouses are not reported or are reviewable by anyone,  2; private conversations and agreements between spouses are just that - private and cannot be reviewed even with a court order (spousal privilege) and 3; this type of giving from spouses to children is very common and done all the time reguardless of which spouse earned the money.    Each spouse gives $15K to stay under the limit.  Nothing to worry about.

**Disclaimer: This post is for discussion purposes only and is NOT tax advice. The author takes no responsibility for the accuracy of any information in this post.**
tagteam
Level 15

Can i gift $15k to my son and $15K to my wife where she uses the $15K to gift my son a total of $30K?


@macuser_22 wrote:

....this type of giving from spouses to children is very common and done all the time reguardless of which spouse earned the money.    Each spouse gives $15K to stay under the limit.  


It is very common, except in this case, the father is transferring money to his wife solely for the purpose of having his wife, in turn, give that same amount to his son so that the father can avoid the reporting requirement, et al (i.e., he would have exceeded his annual exclusion if he had given the extra $15,000 to his son directly and it would also reduce his lifetime exemption).

tagteam
Level 15

Can i gift $15k to my son and $15K to my wife where she uses the $15K to gift my son a total of $30K?


@macuser_22 wrote:

....private conversations and agreements between spouses are just that - private and cannot be reviewed even with a court order (spousal privilege)...


Spousal (marital) privilege covers disclosure of private communications between spouses during a marriage. It would not cover the spouses' financial statements which would show a transfer from the father to his wife and then the wife's financial statement showing a transfer, shortly thereafter, to the son.

 

The privilege would also not prohibit the son's disclosure of communications regarding the transaction between his father and his father's wife (nor protect the son's financial statements relating to the transaction).

 

 

 


@macuser_22 wrote:

I have never heard of this being applied to spouses  giving to children because 1; transactions between spouses are not reported or are reviewable by anyone.....


I am not sure what the point is of the above-quoted statement. 

 

The fact that you have not "heard of this being applied" does not mean it is inapplicable, particularly if you do not practice in this area and/or have no formal tax education or training. 

 

Further, it is almost a certainty that an overwhelming majority of reportable gifts are unreported and it is virtually impossible for such gifts to be reviewed without examining written (printed) documents.

Dynamic AdsDynamic Ads
Privacy Settings
v