The wife and I gave a large enough gift in 2019 to require Form 709. We are in CA, a community property state.
Form 709 instructions say we must each file a form for half the total gift because it was community property. That part I understand.
What I don't understand is the term "gift splitting" and the split gift part of 709. I am guessing that "gift splitting" does not apply and I should leave it blank because we're each filing for half the total gift. Right?
I wasn't asking which lines to complete. There are lines 12-18 in Part 1 and Part 2. I understand both of those Parts. I believe you meant Part 1.
The question is about Form 709 Schedule A Part 1, "Gifts Subject Only to Gift Tax", which has no line numbers.
The instructions are weird. Page 1, "Who must file" says community property requires 2 separate forms.
Page 6, "Split Gifts" also says 2 separate forms are required when gift splitting with a few inapplicable (to us) exceptions. Schedule A of the form talks about dividing the gift in half. But we already divided the gift in half, half on each of 2 709s.
It's as if the IRS is being purposely confusing. First time that ever happened!
Let’s take an example of a gift of $100,000 from community property. Sch A has you divide the gift in half. That $50,000 flows to Part 4 line 1. The annual exclusion ($15,000) is subtracted leaving $35,000 on line 3 and line 11. That amount goes to page 1, part 2, line 1 where the tax is calculated and later in the form the $11.4 million gift exclusion will zero the tax out. As you have said, the same information on your spouse’s form is also filed so the total amount of the gift is accounted for.
I understand all that. My question is simply whether "gift splitting" is something I need to do. I'm going to assume it's not because the gift is already split. It's just the form instructions which confuse me. So I decided to phone the IRS.
After 46 minutes on hold, I spoke to a rep via their special Gift & Estate Tax phone number only available 8:00am - 3:30pm EASTERN time (I'm in CA).
These friendly phone reps do not provide help completing Form 709. The Tax Assistance group no longer exists, she told me. I assume budget cuts got them the axe. The current "special" group can only help with the mechanics, as in you sent a form to the wrong address or want to inquire about a form's status. SMH.
You are correct. You have already split the gift by each of you filing a form for half of the gift.
Definition of a Split Gift: A split gift refers to a gift that is made by a spouse to a third person. The gift is given to a third person for gift tax purposes. It is also known as gift splitting or gift splitting election. ... Under split gift, a married couple can treat gifts made by one spouse as if they were made one-half by each spouse.
I’m confused and am not able to get online or phone help from irs.......so the $11.4 million exclusion goes where? Part 2, line 7? And is that in every case? So basically if giving $100,000 gift, there will be no balance due as long as the donor has not exceed the lifetime giving amount of 11.4 million? And if splitting the gift between spouses, each $50,000 gift would be treated the same?
Yes, it goes on line 7 of part 2. Yes, each spouse completes a separate 709 and each half of the gift is treated the same on each form. If you don’t have it, the instructions for the form are here: