Form 709 - superfunding 529 and gift tax

[jschoomer]

Wife and I contributed total of $63,000 to our son’s Virginia 529 plan in 2024 so we need to file 709. Wasn’t aware that it also had to be done before 15th April. So from what I understand, I can superfund the 529 plan, and not have the excess amount count towards the lifetime estate limit.

My wife contributed $32,000 from our joint bank account to a 529 account she owns (beneficiary is our son), and I contributed $31,000 from our joint bank account to a 529 account I own (beneficiary is our son). Question:

1. Do we file separate Form 709 claiming $13,000 in my form and $14,000 in her form?
2. What is the answer to line 19 question “Did you and your spouse make gifts to third parties?” If it’s “Yes”, then do we consent to gift splitting and send both our forms in the same envelope?
3. Is there a penalty for filing Form 709 late even if we don’t have to pay any gift taxes?
4. Can we superfund the 529 again in 2025… …having done it in 2024? If yes, then, I can contribute to $25,000 and she can contribute to $24,000 without incurring any gift taxes, correct?

Thanks!

[Hi Palms]

1. Yes, you each file a separate 709.

2. You split gifts with your spouse so each can take advantage of your entitlement to the lifetime exemption. Mail both forms in the same envelope.

3. No penalty.

4.  Yes, you can fund it again in 2025 and, of course, will file 709s for this year.

[jschoomer]

Thanks for your reply. I have a follow-up to your answer for question #3: What is the answer to line 19 question “Did you and your spouse make gifts to third parties?” If it’s “Yes”, then do we consent to gift splitting and send both our forms in the same envelope?

Your answer is that I should be "gift-splitting". Is it because the money was contributed from a joint account? I can still answer "Yes" to the line 19 question and in Part III, line 1 say No to "wanting to have that excess be considered as made one-half by each of us". We can still file individual 709s and send in separate envelopes. Can you please explain the advantage here of "gift-splitting" I would prefer not to go through the whole attaching a Notice of Consent with the two forms - previously spouse could just sign, but starting 2024, you need to attach that document.

[Hi Palms]

You're correct in the sense that gift splitting is not necessary to the extent that the gifts were from your joint account and, therefore, one-half is considered to be from each of you.