gift tax

[rrosbor11]

My mother passed in 2020, and my dad has been giving money to his children, and didn’t know he was suppose to report it when he filed his taxes with an agency. He has given approx $631000.00 what should he do? 

[M-MTax]

Have him get a Tax Pro in his area and one experienced in gift tax returns.

[xmasbaby0]

The Form 709 is not part of an income tax return.   It is a separate form that must be filed all by itself.   TurboTax does not support Form 709.    Your father should consult a local paid tax professional for help with this.

Gifts given to family members, friends or other individuals are not deductible.   Gifts received are not taxable to the person who received the gift, and are not entered on a tax return.

If your gift exceeds the yearly limit ($17,000 per individual)  imposed by the gift tax rules, then you will need to complete a Form 709 gift tax form and send it to the IRS, although it is very unlikely that you will owe any tax.    In 2024 that yearly limit will increase to $18,000.

TurboTax does not support Form 709.  It is not an income tax form and would not be included as part of an income tax return.

Here is a link to the form:

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

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

[Opus 17]

For each year that he gave more than $17,000 per person (this can also mean $34,000 to a married couple), he must file form 709.  This is not part of a regular tax return, it is filed separately, and not included in Turbotax.  It can't be e-filed, it must be printed and mailed.

Payment of gift tax is not required unless his lifetime total of gifts is more than $13 million, but gifts over the $17,000 annual limit must be reported to count against that lifetime limit.

Past year versions of forms are found here.

https://www.irs.gov/forms-pubs/prior-year

For gifts made in 2024, the form 709 would be due April 15, 2025.

There is a penalty for not filing the form, but if he catches up and files, and the IRS decides to assess a penalty, he can ask for a waiver for cause or general forgiveness.

[M-MTax]

For 2018-2021 the annual gift tax exclusion per person was $15,000.

For 2022 the annual gift tax exclusion per person was $16,000.

For 2023 the annual gift tax exclusion per person was $17,000.

For 2024 the annual gift tax exclusion per person is $18,000.

For 2025 the annual gift tax exclusion per person will be $19,000.

Penalties aren't too much of a big deal since they're based on gift tax owed. 

FWIW

[TomD8]

Here's a TurboTax help article explaining the gift tax:

https://turbotax.intuit.com/tax-tips/estates/the-gift-tax-made-simple/L5tGWVC8N?srsltid=AfmBOoo0yz3k...

[rrosbor11]

Hi, 

If he did not know to file a 709 will be be penalized?

[taxlady28]

It is possible but probably not.  Deal with it if it happens by asking for a pardon due to not knowing about it.

[M-MTax]

If he did not know to file a 709 will be be penalized?

Almost certainly not because the failure to file or pay penalty is based on the amount of gift tax due which is NONE for most people.