Is it necessary to file Form 709 and is it filed separately?

[RMD20201]

When is it required to file Form 709? And is it filed separately from the Tax Return or do I send it along with the Tax Return? 

Had a joint account with a parent with parent's tax id. The account was closed in mid-2022 and the money was dispersed to the adult child. Since the 1099-INT came in the parent's name, the parent is including the interest income in the tax return that is filed jointly. I am not sure in Form 709 needs to be submitted. What is the purpose of this form and can a parent submit multiple Form 709s in a year for other joint accounts with other children or just 1x/year or 1x/lifetime? Does this apply to both parents if they file jointly or apply separately to each parent?

Thank you.

[Anonymous_ · Accepted solution]

Form 709 is filed separately from your federal income tax return and is not supported by TurboTax.

See https://www.irs.gov/instructions/i709#en_US_2022_publink16784xd0e909

Generally, citizens or residents of the United States are required to file Form 709 if they gave gifts to another individual in the 2022 tax year totaling more than $16,000 (the amount is increased to $17,000 for the 2023 tax year).

See https://www.irs.gov/instructions/i709#en_US_2022_publink16784xd0e314

[xmasbaby0]

Form 709 is not part of your income tax return, nor is it supported or provided by TurboTax.  It is a separate form that you file with the IRS if you give a gift that requires its use.

Money that you receive as a gift is not taxable income to you, and you do not need to report it on your income tax return.  Money that you gave as a gift to someone else is not deductible for your taxes.

Turbo Tax does not support the gift tax form 709, but here is a link:

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

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

[Anonymous_]

Form 709 is an annual return and is filed once for all gifts made during any particular tax year (i.e, if required to be filed for any particular tax year, one Form 709 reports all gifts made during that year).

[RMD20201]

Hi - thank you for your response but unfortunately it does not answer my question completely. I had put a scenario in the second paragraph for which I did not receive any guidance.

"Had a joint account with a parent with parent's tax id. The account was closed in mid-2022 and the money was dispersed to the adult child. Since the 1099-INT came in the parent's name, the parent is including the interest income in the tax return that is filed jointly. I am not sure in Form 709 needs to be submitted. What is the purpose of this form and can a parent submit multiple Form 709s in a year for other joint accounts with other children or just 1x/year or 1x/lifetime? Does this apply to both parents if they file jointly or apply separately to each parent?"

If you can shed some expert guidance on this, I would greatly appreciate it.

Thank you.

[PattiF]

The purpose of the form is to record gifts totaling more than $16,000 in one year to one person to the IRS. One person can give $16,000 to 100 people and not need to file the gift tax form. A married couple could give $32,000 a year to one or more people and not need to file the Gift Tax Form 709. If a married couple gives more than $32,000 to one person, then they each would file Form 709. A joint Form 709 can't be filed. 

The annual gift exclusion for 2022 is $16,000. Two gifts can be given from a joint account which means that $32,000 can be given from a joint account without the need to file a Form 709.

The gift exclusion amount usually goes up every year.

The parent who is required to file Form 709 would file only one return each year. The return needs to be filed each year that more is given than the annual gift exclusion. 

The form is difficult to complete.

Please see additional information from the IRS.

@RMD20201 

[RMD20201]

@PattiF: Thank you for the response. Also, thank you to @Anonymous_ and @xmasbaby0.

@PattiF:

I took a look at the IRS and I see the section on Joint Tenancy. I believe this would apply in our situation where a parent and an adult child had a Joint bank account and the parent had been paying taxes on Schedule B of the tax return each year. Now, the Joint bank account is closed and the bank check (much greater than $16K) was made out and sent directly to the adult child. Does the parent have to file Form 709 for the whole amount or 50% or none? 

Thank you!!

[Anonymous_]

In a standard joint tenancy account, you would each be able to withdraw all of the funds without the consent of the other. If that is the case here, then the gift is the entire amount held in the joint account.

If you needed the permission of the other party for a withdrawal, then there would have been a gift at the time the account was established.