Gift Tax Form 709, Schedule D, Computation of Generation Skipping Transfer Tax

[Romper]

Reference: Gift Tax Form 709, Schedule D

Can anyone explain Schedule D, Part 1, Column D on Page 4?

While the title of Column D is "NONTAXABLE portion of transfer", the instructions for 2021 (pg. 18) states "You are allowed to claim the gift tax ANNUAL EXCLUSION currently allowable for your reported direct skips".

Since my Direct Skips are included on Schedule A, Part 2, aren't their annual exclusions already included on Part 4, Line 2?

Assuming the following, would one make an entry in Column D and what amount would one enter?

Schedule D, Column C (Value from Schedule A, Part 2) has two entries (split gifts). As the donor, my gift has a value of $17,000.  The gifts by spouse also has a value of $17,000.

Column D Instructions (2021 pg. 18)
You are allowed to claim the gift tax annual exclusion currently allowable for your reported direct skips using the rules and limits discussed earlier for the gift tax annual exclusion. However, you must allocate the exclusion on a gift-by-gift basis for GST computation purposes. You must allocate the exclusion to each gift, to the extent desired but not exceeding the maximum allowable amount, in chronological order, beginning with the earliest gift that qualifies for the exclusion. Be sure that you do not claim a total exclusion of more than $15,000 per donee.

[tagteam · Accepted solution]

I think that part is solely for GST tax purposes so you would enter the standard exclusion.

I could be wrong, however, so you might want to go with whatever your software provider recommends.

Hopefully, they have some sort of support system.

[Romper]

Thanks...

I submitted the question to them. Waiting for a reply.

In the examples I showed, I entered $15k in Col D for each of the examples. Nothing changed at my donor's level.

It did change the Net Transfer for in Col. E.

I suspect you are correct, I.e. the exclusion is for the GST.